What happened

Shares of the clinical-stage biotech Dynavax Technologies Corporation (NASDAQ:DVAX) bolted higher this morning on elevated volume as a result of the company's 2017 American Society of Clinical Oncology (ASCO) presentation over the weekend. Specifically, Dynavax announced the initial results from the dose escalation part of its combined phase 1/2 metastatic melanoma trial investigating its intratumoral TLR9 agonist SD-101, in combination with Merck's (NYSE:MRK)checkpoint inhibitor Keytruda.

Impressively, the combo reportedly produced a 100% overall response rate in seven anti-PD-1/L1-naive patients and a complete response rate of 29%. As of 11:26 a.m. EDT, Dynavax's shares were up 15.2% on the back of this news. 

Upward trend.

Image Source: Getty Images.

So what

The key takeaway is that SD-101 appears to boost Keytruda's efficacy in metastatic melanoma patients without a concomitant increase in unwanted side effects. That's a great result for Dynavax, as it may eventually lead to a lucrative commercialization deal with Merck later on down the road. 

Now what

While skin cancer is a multibillion-dollar drug market that's unfortunately still growing, investors should probably temper their expectations for SD-101 as a near-term value driver. This experimental immunotherapy, after all, remains at least a year or so away from producing data that might force Merck into a commercialization deal that contains up-front milestone payments.

In the interim, Dynavax is nearing a pivotal advisory committee meeting for its experimental hepatitis B vaccine, Heplisav-B, on July 28, 2017. To be honest, this upcoming regulatory catalyst is likely to play a much larger role in the company's near-term valuation than SD-101's early-stage results. So, before buying shares, investors should feel comfortable with Heplisav-B's chances heading into its advisory committee meeting next month. 

George Budwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.