What happened

In July, a 12-to-1 Food and Drug Administration advisory committee vote in favor of Dynavax Technologies Corporation's (NASDAQ:DVAX) experimental hepatitis B vaccine allayed previous concerns that had been pressuring the stock. The positive result doesn't guarantee an approval, but it was encouraging enough to send shares 64.2% higher last month, according to data from S&P Global Market Intelligence.

So what 

During clinical trials supporting the experimental vaccine's application, five out of 4,425 patients given Heplisav-B suffered a pulmonary embolism during the 52-week observation period. That's five more than investigators observed among 1,420 patients receiving the vaccine used for comparison.

Excited man in front of an upward sloping chart.

Image source: Getty Images.

The pulmonary embolism rate, plus several other safety issues, had led to heavy losses for Dynavax shares over the past year. When asked if the total body of safety data was good enough to recommend approval, 12 of the panel members said yes, one said no, and three refused to issue an opinion. That isn't exactly a slam dunk, but it's better than the market was expecting, which is why the stock has regained previous losses and at last glance stood about 8% higher than one year ago.

Now what

The FDA is expected to issue a decision on or before Aug. 10. Investors can find comfort in the FDA's lack of concern regarding Heplisav-B's efficacy, but a green light is not guaranteed. Although the agency tends to follow the guidance provided by independent advisory committees, it has been known to go against their recommendations.

If approved, safety concerns will hound Heplisav-B's commercial launch, but it would have a big advantage over the competition. A disturbing number of people never come back for their last dose of currently available treatments, typically six months after the first. Dynavax's vaccine schedule takes just four weeks to administer, which has most analysts predicting peak annual sales of about $700 million.

At recent prices, Dynavax sports a relatively modest $922 million market cap. Biotech stocks tend to trade at mid-single-digit multiples of annual sales, which suggests this stock could still more than double your money.

Cory Renauer 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.