Editor's note: This article is a stock pitch made by a member on CAPS, The Motley Fool's free investing community. The pitch is published UNEDITED and is the opinion of the CAPS member whose pitch it is -- in this case, zzlangerhans.
Each week, Motley Fool editors cull a top stock idea from the pitches made on CAPS, The Motley Fool's 180,000-member free investing community. Want your idea considered for this series? Make a compelling pitch on CAPS with a minimum length of 400 words. Want to follow our weekly picks? Subscribe to our RSS feed or follow us on Twitter.
|Company||Dynavax Technologies (Nasdaq: DVAX )|
|Stock Price at Underperform Recommendation:||$3.28|
Dynavax Technologies Profile
|Star Rating (out of 5)||**|
|Market Cap||$46.7 million|
|Industry Peers||GlaxoSmithKline (NYSE: GSK )
Dendreon (Nasdaq: DNDN )
SciClone Pharmaceuticals (Nasdaq: SCLN )
Sources: S&P Capital IQ, Yahoo! Finance, and Motley Fool CAPS.
I think the momentum has run out for Dynavax, and there's a good chance the share price will drop substantially between now and when any regulatory decisions are made regarding Heplisav.
1. The Heplisav ship has been listing heavily ever since the FDA shot down the vaccine for general use, supposedly due to a single instance of autoimmune disease in a recipient. Merck dumped the partnership. The company is now seeking approval of Heplisav in a relatively small subset of the general population (over 40 and chronic kidney disease).
2. There were three serious autoimmune events reported in the follow-up phase III trial.
3. The Heplisav BLA submission was postponed from Q4 2011 to Q1 2012 without much explanation.
4. The company has taken advantage of the stock run-up by raising money heavily through dilutive financing. Prudent, yes. Optimistic, no. The cash cushion may make Dynavax another green thumb stock if the share price gets beaten up badly on Heplisav rejection or sell-off after approval.