What happened

Shares of the clinical-stage biotech Dynavax Technologies Corporation (NASDAQ:DVAX) gained more than 28% in pre-market trading today -- soaring more than 40% at the open -- after the company announced that the FDA has accepted its response to the Complete Response Letter (CRL) that was previously issued for its experimental hepatitis B vaccine called Heplisav-B. 

So what

In the immediate aftermath of the last CRL for Heplisav-B, Dynavax's management said that the company may need to license the vaccine out to a bigger partner to deal with the FDA's additional requests. Of course, a licensing deal would have largely gutted the vaccine's long-term value proposition, and placed the onus for value creation onto Dynavax's earlier-stage pipeline of cancer immunotherapies.

Rocket taking off.

Image source: Getty Images.

With this somewhat surprising announcement, however, the company has successfully reopened the door to a possible regulatory approval for Heplisav-B in the near term, while maintaining the vaccine's all-important commercial rights. 

Now what

The FDA has reportedly assigned a Prescription Drug User Fee Act (PDUFA) action date of Aug. 10, 2017 to Heplisav-B's regulatory filing. Before investors get too excited, though, it's important to keep this vaccine's rocky history with the FDA firmly in mind. Heplisav-B, after all, has now received two CRLs, even though it produced what appeared to be fairly strong results in multiple late-stage trials.

In other words, the FDA doesn't appear to be in a hurry to approve another hepatitis B vaccine, despite the documented need for a vaccine that's more efficacious in hard-to-treat populations like diabetics. 

Having said that, the market will probably continue to warm up to Dynavax's shares heading into Heplisav-B's upcoming PDUFA date. The vaccine's estimated peak sales of around $700 million, after all, stand at more than twice the company's current market cap. 

Bottom line: Dynavax appears set to recapture a fair amount of its former glory in the coming months, but these gains could also prove fleeting if the FDA gives Heplisav-B yet another thumbs down.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.