Please ensure Javascript is enabled for purposes of website accessibility

Why Dynavax Technologies Corporation Stock Is Rising Today

By George Budwell - Oct 2, 2017 at 9:11AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Dynavax is reportedly exploring its options regarding vaccine candidate Heplisav-B.

What happened

Shares of Dynavax Technologies Corporation (DVAX 2.94%) are up by over 11% in pre-market trading on modest volume this morning, following a report that management is exploring different strategic options for its hepatitis B vaccine, Heplisav-B, including a licensing deal or an outright sale.

Man receiving an injection from a nurse.

Image source: Getty Images.

So what

After receiving a positive advisory committee vote earlier this year, Heplisav-B is now widely expected to get the green light from the FDA in the next few weeks. If that line holds, the vaccine should be on the market in early 2018.

While that's certainly good news, the problem is that Dynavax lacks the infrastructure necessary to maximize the vaccine's commercial potential. So a licensing deal or a sale of the vaccine to a bigger pharma might be the best route for Dynavax at this stage. The company, after all, could use a cash infusion to apply toward the development of its early to midstage immuno-oncology pipeline. 

Now what

Dynavax has yet to decide exactly what to do with Heplisav-B. And if a suitor isn't willing to pay a reasonable price for the promising vaccine, the company appears set to proceed with a launch on its own.

However, the most likely outcome is, in fact, a licensing deal. FDA-approved vaccines are highly sought-after products in the pharma space because they tend to provide sustainable levels of revenue for upwards of a decade or even longer. Plus, Heplisav-B has a compelling clinical profile that suggests that it could quickly become the market share leader, generating upwards of $700 million in sales per year at peak. 

The bottom line is that either a licensing deal or a sale would relieve Dynavax from having to divert cash away from its fledgling immuno-oncology pipeline to raise a sales force, and it would also greatly extend the company's cash runway. That's a win-win for shareholders, and why a deal seems imminent.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Dynavax Technologies Corporation Stock Quote
Dynavax Technologies Corporation
$12.96 (2.94%) $0.37

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.