The Journey Of A Biotech CFO With Kelly MacDonald, CFO Dynavax Technologies

Jack, thanks so much for having me. I'm a first-time caller, longtime listener.

Sure. So first of all, as you mentioned, I'm Kelly McDonald, I'm the CFO of Dynavax. Dynavax is a biopharmaceutical company based in the Bay Area here in California, and we develop and commercialize innovative vaccines to protect public health against infectious diseases. Our novel technology is actually a vaccine adjuvant, which is a substance that enhances the body's immune response when combined with a protein-based antigen, and that's what we use to create our vaccines. From a 10,000-foot level, we have a core commercial asset: an adult hepatitis B vaccine sold in the US and outside the US and Europe. It's poised to be the leading product in its category. We've also commercialized our proprietary vaccine adjuvant through multiple COVID-19 vaccine collaborations around the world outside of the United States, which I'm sure we'll get into. And we also have an exciting earlier-stage clinical pipeline of a couple of different vaccine candidates that we're really excited about. It's been extremely rewarding to play the role I've been able to play for the company for the last couple of years, not only to help improve public health overall, but I'm really proud of our work to support vaccination, particularly during the global pandemic when there was no playbook. So I appreciate the opportunity to be here today, Jack.

Dynavax is a publicly held company. It trades on the NASDAQ with all of our other biotech friends. It's been a very volatile environment for the last couple of years.

Sure. I grew up in a small town in northwest Connecticut called Burlington. At the time I grew up there, it was less than 6,000 people. We had one half of a stoplight—it was sort of just a light that mostly worked, but it worked as a blinking red at the top of a hill. So I had strong influences from my close community there. I was very close with my family. Both of my parents worked full-time, and my brother turned out to be an exceptional athlete. So I found myself surrounded by incredible people who are some of the most hardworking people I've ever met. It made me really motivated to always be the hardest working person in the room, which has served me well, at least in the beginning of my career. I've had to evolve that over time, but I'm really grateful for my foundational years.

I played at Fairfield University undergrad. I got my MBA at UMass. And yeah, my brother is a far more accomplished athlete than I am. He's a sub-two-hour-and-20-minute marathoner to this day, which is unbelievably impressive. I'll take every opportunity to tout his accomplishments. He's an incredible inspiration for me. Growing up in a small area, all of our friends, including my brother and I, worked at the local McDonald's, which was two towns away. That was the nearest place we could work. We had a great time there and made a lot of great memories. For being the first job after getting our driver's licenses, it was a unique way to understand how teams work, how to solve problems through different dynamics and fast-moving challenges, and working with different people. That was important from a foundational work perspective. And you mentioned sports and the role they played in my life. Similarly, pulling on that thread of collaboration, teamwork, and problem-solving, growing up playing softball and getting the opportunity to travel all around the country during high school, and then ultimately playing one year of Division One softball in college, it was those same themes. I was able to rely on them and realize that for me personally, what motivates me is to work with other people, solve problems with other people, and have fun while doing it.

He's two years younger than me.

I love that theory. I'm going to bring it back to him today and try that one on for size. I'm as competitive as a person can possibly be, so there was never a single moment where I let him win anything. For quite some time, I was just physically larger, both in width and height, so I had a physical advantage. But I think there might be something to that, Jack.

No, I went to work at PwC. That's where I really cut my teeth and learned a heck of a lot about not only the biotech industry but also the tech industry. I had some other opportunities to get great transaction experience. I started my career at PricewaterhouseCoopers out of the Stamford office, but the Stamford office is part of the New York Metro Group, so we really served clients throughout New York and the whole New York metro area. That was a great opportunity for me to learn across a number of sectors. I actually started my career during the financial crisis, so I was acutely aware that I needed to have a stable job. That was part of the reason why I didn't stay another year in college to get my MBA. I made the decision to get some career experience and work experience, and then pursue both my CPA and MBA after a few years of real-life professional experience.

I think both. It was synonymous at the time, and then I think now it's just PwC with the rebranding.

What an interesting question. Both have been extremely valuable, and not as much the letters as the experience. Certainly, in my particular MBA experience, because I had a few years of professional expertise under my belt already, I was able to learn a lot about problem-solving and different ways of thinking from non-finance folks and folks outside of the industry. That was really valuable for me. Differently, for the CPA, it's all the technical skills needed to really understand what drives the financial statements, where judgments are appropriate, and how to think about broader corporate finance concepts, which is extremely valuable as well. So I think the combination of CPA and MBA is a great one for CFOs, especially today's CFOs, who are expected to be very professionally competent and subject matter experts not only in accounting but across all corporate finance concepts, as well as operations. The CFO role has evolved to include more corporate strategy and strategic thinking. So the CFO is expected to cover a lot of ground and be able to think both technically and strategically. So to me, I can't pick one. I think it's both, and that would be my guidance.

Absolutely. PwC was such a foundational and critical stepping stone to my career. I started in assurance, as I mentioned. My first few weeks were during the financial crisis, so the company was going through layoffs. Not having all that context coming in as a 22-and-a-half-year-old, seeing that straight away reminded me to go back to basics and just put my head down and work as hard as I possibly could. That's always been the role modeling my family gave me, and it's been a gift. So I really leaned into that and took on as many opportunities as I could. As folks left in any organization going through dynamic change, there are opportunities because the ground is moving. So I said yes to every single opportunity. One of the opportunities that was outside the scope of the industry I was working in at the time was a pharma startup client. That client, over the course of a couple of years of me serving it from an audit perspective, ended up getting FDA approval for their first drug. I was in the audit room, and that was a pivotal moment for me. I realized, 'Wow, this is really neat,' because I was able to see this drug through development, meet with scientists, sit with biologists and chief scientific officers and CEOs, and I was in the room with some of these folks as they made decisions. I felt that was a really unique opportunity to be part of that story, even though I was far removed as the auditor. That spurred my love for biotech and my passion for the industry. So I knew I wanted to eventually, once I put my years in at PwC and learned as much as I could and built my network, go into the sector. With Ironwood, I saw a unique opportunity in a growing company that had just launched what's now a billion-dollar product. I saw a team of dynamic leaders and tremendous growth opportunity. I joined as a technical accountant and a bit of a bean counter building SEC filings, and I used that as a platform to learn, ask tons of questions, and learn everything I could about the company, the biology, and the corporate strategy. I leveraged that background as a baseline to continue to grow and take on a variety of roles. Ultimately at Ironwood, I was part of some of the most critical strategic decisions, including multiple commercial launches and a couple of failed commercial launches, which was disappointing at the time but served as a tremendous growth opportunity. Sometimes knowing what not to do is just as important as what to do. I saw a lot of business development, and with that came important lessons: integration is sometimes just as important, if not more important, than the math behind the deal and the strategic logic. And maybe most importantly, at Ironwood I was surrounded by incredible mentors who helped me grow and develop during a pivotal part of my career.

I do. Nowadays, one of the key things we focus on in our finance and accounting organization at Dynavax is making sure that everybody sees finance as a strategic asset to the company. It ends up being so much more than just reporting on historical performance. Not only projecting future performance, but also identifying gaps, growth opportunities, and laying out different alternative paths the company can take, considering the risk profile, particularly in biotech, of the different ways we can deploy capital to drive long-term value. There are so many elements unique to this industry and the biotech sector that I personally find a lot of passion in. Being the CFO and in finance in general at any organization in the sector gives you a tremendous opportunity to create value and learn so much about the company.

Many mentors. I feel so fortunate. I find myself reflecting, in preparation for even this podcast, on who have been the most influential people in my career. I've been so fortunate to have senior leaders in finance as well as outside of finance, in commercial and executive office leaders, and CEOs throughout my career who have been so inspirational and influential, all in their own unique ways. But to me, the thing a good leader does is inspire confidence and give you the courage to take risks. As I reflect on my personal career journey, I've taken a lot of risks. Some have paid off in more accelerated fashions than others; some were a little bit of a step back in order to learn something new. Maybe I would have ended up failing at that thing, but that was a decision I knew and was okay with at the time, because every risk you take, you learn one way or another, even if it doesn't positively contribute to the ultimate trajectory of your career.

Absolutely. I think, unique to this sector itself, it's a constant reminder that everything we do, every dollar we spend, it's a one in ten or one in a hundred success rate at any given stage of scientific discovery. But you can't stop doing the hard work and you can't stop exploring and innovating, because that's when companies fail and that's when you personally stop growing. So what applies to big-picture corporate philosophy can also apply to the individual as well.

It's my first time as a CFO, so at Dynavax. Although I had a rookie year in 2021, this is technically my rookie season as a CFO. I feel like we've been through a tremendous amount of growth as a company, and I'm really proud of the transformation the company has made since I joined in 2021. But what really brought me to the role was the opportunity to make a meaningful impact during the pandemic. Going to work for a vaccine company during the middle of a global pandemic was not for the faint of heart. It was a big decision. For me and my family, it was also a cross-country move. Born and raised in New England, I spent the majority of my adult life in Boston, so moving to the Bay Area was exciting and very nerve-wracking. But ultimately, it was a chance to work with this group of people in this company that had a mission I really aligned with and believed in. I've listened to other folks on your podcast iterate this as well: it's all about who you're working with and being passionate about the work you're doing. That's where I find the most value and motivation. Dynavax hit every single one of those notes for me.

It's one of the things I've been working on since joining Dynavax. It's really about helping people—not only the company but the whole executive team as well as the board—understand that the finance organization is truly a strategic asset to the company when built properly and leveraged strategically. For Dynavax, it's interesting. We talked a little about what personally brought me to the company and the feel-good factors you think about when you want to be surrounded with people as you punch through walls and get through tough challenges together. But just as much of that is the technical competencies required. So I'm making sure that you have that view on capital allocation that matches up with the company's strategic initiatives, priorities, and long-term growth. Having those things be hand in hand is critical for success in driving value. You can't deploy capital to generate value if that's not aligned with your strategic mission and vision. So you really have to have a very strong partnership and alignment between the CEO, CFO, and board. Uniquely, that was something I was looking for as a first-time CFO: that I could be really aligned closely with the board's vision and the CEO's vision. So I think all these things come together.

No, he's not the founder. He came on, I believe, as a consultant as an assistant controller, and really worked his way through the organization. He was curious and very intellectually capable, and moved from accounting to finance to commercial finance, ultimately becoming a brand lead for what's now our lead commercial asset. He led the restructuring of the company back in 2018 and into 2019. The company's been through a number of different eras, and that's how I think about organizational growth. We just sort of wrapped up the most recent era and are starting on the next one. Ryan has been a tremendous thought partner and a tremendous leader, someone I really respect and see eye to eye with in terms of how to drive value. It also helps that he has that finance background. Not every CEO does.

He was never the CFO. He was deep into commercial strategy. But he certainly has a very strong financial acumen and financial background. Does he think he's the CFO sometimes? No, I don't think so. I think he respects my corporate finance abilities, and I think he learns a lot from me too, which is great. We just have a really nice partnership. At the same time, it is really nice to have somebody who can articulate some of the more complex strategic finance ideas. We explore a lot of unique financing opportunities and convertible debt, and some of this stuff can get very technically complex and unique to where our company is in our stage of growth and life cycle. Having a CEO who actually understands some of the vocabulary is really helpful.

It is. I was very fortunate to inherit an extremely strong team at Dynavax. When I joined the company, they had just completed a large restructuring, and the team was working off of what I would consider a very streamlined and even skeletal organizational structure. The company had been through a lot of change, and it was a very dynamic time. With that background in mind, I think the team was probably a little uncertain about what to make of a new CFO, a new leader, somebody from Boston. Not only am I a transplant with a funny accent sometimes, but you're always uncertain when you get a new leader exactly what they're going to try to solve for in the next 90 days, year, or two years, or what their vision is. So I feel it was definitely a blessing to have the opportunity to have a group of people who were open to my leadership style, who have all grown tremendously as we've grown as a team. They've all developed in a really impressive way. Our team now, I think one of our strengths is this sort of secret sauce. I always remind the team that they have this secret sauce thing; it has nothing to do with me. This is a group of people who empower each other and want each other to do well all the time in their personal and professional lives. It's such an incredible group that solves problems, even outside of finance, because we are a strategic asset to the company and we're very embedded in the organization. It's taken a few years to build those processes, but I think at this point everybody's really proud of the work we've been able to do collectively. To be part of that and to reflect on the team's progress over the last three years as the leader of that team, I just couldn't be more proud. For me, it's just making sure they are clear on what the vision is for what we're trying to solve for, leveraging the right technologies. It can always be difficult to focus on the long term when we're so entrenched in the day-to-day. One of the areas I can bring a lot of value for our teammates is helping them see that vision and focusing on those critical items, and reminding everybody that, 'Hey, remember two years ago we used to close the books in ten days? We now do it in five, and by the way, we've been able to automate over 10 to 15% of our previously manual controls.' Reflecting on these things that in the day-to-day feel like such a grind, and then you reflect back two years ago and take credit for it, I think goes a long way. So where I sit today, it's been just about under three years of working together, and coming up on a great reflection point with a lot of wins behind us.

Just about everybody. We've added some critical capabilities, and as the company has grown, we've had to add some technical expertise and corporate strategic finance to support our corporate development initiatives. We've also built out a little more strength in our investor relations capability and our internal communications capability, particularly because we have fully leaned into being a remote organization, which has certainly had its benefits and challenges. We're still learning every day along the way. So we've supplemented the team and brought on some incredible talent, and folks continue to learn from each other and grow together.

Thanks. In large part due to the success of the organization as well. I think people want to work for organizations that are not only doing good work but with purpose and reasons they can be proud of.

Both, actually. Mentoring is kind of a funny thing because I don't see myself as that either, Jack. So it's funny you squared it up that way. I think both. I look at all the incredible mentors I've had in my career, and at the time they weren't set forth to be my formal mentor. They were just people I really trusted and could get real advice from, even when I didn't even know I was seeking it. Just like, 'Hey, what do you think about this opportunity to take on this project?' or 'What's a great way I can ask to be in this room for this discussion just so I can listen?' Stuff like that, where you get exposure and grow and get that perspective over time. Because of the informal nature of my experience, I look for opportunities to make sure that I'm available for our employees at Dynavax and even folks I've worked with at Ironwood and PwC and have met along the way at conferences. And then on the formal side, I'll raise my hand every time when there's a mentoring opportunity that's a little more formal or structured.

It's certainly one of the biggest challenges. Just as challenging as it is to sit with that constituency and learn about the biology, clinical, regulatory, and technical risk with any given clinical or preclinical program, it's equally challenging to share different corporate finance concepts and perspectives. But one of the things we've been able to do really well at Dynavax, and that I've seen done well at other organizations, is create touch points where there is mutual trust and education flow, or information flow, throughout the organization. You can really have a dialogue about different alternative paths for the different pipeline assets and ways of thinking about commercializing a potential clinical candidate. Opening up that information flow over time builds trust and will provide the finance team with the right information so we can do scenario planning and, importantly, make sure that everybody in the organization who's impacted by that scenario planning understands, 'Okay, this is our portfolio review process, and here are a whole bunch of scenarios, and here's what the financial profile looks like.' Taking the time to really invest in making sure the organization understands that—I know I spend a lot of time at the senior leadership team level walking through our long-range plan, our views on corporate valuation, and our views from an outside-in perspective: what are investors saying, who are we targeting from an investor perspective, what do they think, and where are the gaps where we need to communicate better. Providing that education, and it's a two-way street, because as much as some of the more technical scientific folks might not appreciate or fully understand the complexities of corporate finance and corporate strategy, it's so much fun for me to learn a lot more about the ways we're trying to help the scientific community and explore different innovations and breakthrough vaccines in our case, but medicines and therapies throughout the industry at large.

Very elusive. I wish I had all the tips and tricks. It's something I continue to practice every day. I seek just as much advice as I try to give. To me, it's very individual, and it ebbs and flows depending on where I am personally in my life. There are chapters where I'm very career-focused and oriented, and then there are chapters where I have to take a step back and focus more on my personal aspirations. Not to say I'm taking my eye off the ball at work; it's just that sometimes you can put in those 80-hour work weeks that all our finance and accounting colleagues love to brag about—we have the scars to show it. That's not sustainable throughout an entire career, and I think we all know it. So being forthright about where you are and being intentional: if you have a lot of energy to put into this chapter and there's a real reason to drive forward, great, deploy that effort there and know what your priorities are and do it on purpose. Likewise, for me personally, I've got a really exciting chapter coming up. My wife and I are expecting, so we'll have a new addition to the family. I'm sure I'll have to figure out all kinds of new ways to balance work and life, and believe me, I will be asking for all the advice from all the folks who have had to chart this course in the past.

I am. We have two dogs. We love to camp and hike—well, hiking more than camping these days. Love to ski. If I retire, I would love to just be a ski bum and maybe a lift operator or ski tour guide. I don't know what the best job for me would be, but it would certainly be in the mountains.

Sure, I'm happy to share a go-to joke. Although I'm also happy to keep the perception of CFOs as boring accountants a secret that only we know. It's absolutely not true at all. It's such a strategic position and one that's so critical. But my go-to joke right now is actually combining both the season as well as relevant financial concepts. It's: 'Where does a snowman keep its money?'

In a snowbank. And now that I told you the joke, I'm fearing that I might have accidentally reinforced the perception we're trying to debunk here.

Well, Jack, thanks so much for having me. Thank you so much for what you've done with the organization and even with this podcast to bring together the CFO community. I think it's truly valuable and extremely important for us to stay connected and learn from each other. It's been a privilege to be here today with you, and it continues to be a privilege to be part of the Dynavax team. I'm excited for this next chapter of our story and in my own career journey. Thanks again.