Why Dynavax Technologies Shares Imploded

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biotechnology company Dynavax Technologies (NASDAQ: DVAX  ) were eviscerated today, losing as much as 37%, following the receipt of a complete response letter from the FDA regarding its hepatitis B vaccine, Heplisav.

So what: The complete response letter, which is a fancy way of saying "rejection letter," noted that the FDA wouldn't approve Heplisav for the targeted 18-to-70-year-old audience without additional safety testing. Furthermore, the FDA also noted that it was concerned with the occurrence of rare autoimmune events for some patients taking the vaccine and hinted that it may only recommend the drug with restricted use. Finally, the FDA also requested additional information with regard to Dynavax's manufacturing controls and procedures. Dynavax appears hopeful it'll be able to meet with the FDA to address these issues within the next six weeks.

Now what: Investors were given enough warning when Heplisav went before the FDA's panel in November, and, while it received unanimous support from an efficacy standpoint from the 13 voters, eight of the 13 voting members recommended against approval based on inadequate safety data. If that was the extent of Dynavax's problems -- and all it had to do was run an additional safety trial -- then the stock probably wouldn't be hit as hard today. However, the FDA's concern regarding the adjuvants in Heplisav causing rare autoimmune events is a serious concern that could drastically shrink the target audience of the vaccine. I'm extremely skeptical at this point that, even if the vaccine is approved, will it reach enough people to matter? Only time will give us the answer to that mystery.

Craving more input? Start by adding Dynavax Technologies to your free and personalized watchlist so you can keep up on the latest news with the company.

While you can certainly make huge gains in biotechs like Dynavax, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Read/Post Comments (1) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2275917, ~/Articles/ArticleHandler.aspx, 9/27/2016 3:29:19 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 6 hours ago Sponsored by:
DOW 18,094.83 -166.62 -0.91%
S&P 500 2,146.10 -18.59 -0.86%
NASD 5,257.49 -48.26 -0.91%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/26/2016 4:00 PM
DVAX $11.06 Down -0.35 -3.07%
Dynavax Technologi… CAPS Rating: ***