What happened

Shares of Dynavax Technologies Corporation (NASDAQ:DVAX) had a banner year in 2017. Impressively, the biotech's shares rose by a jaw-dropping 373% last year, according to data from S&P Global Market Intelligence.

The impetus behind Dyanvax's quantum leap higher was the FDA approval of its two-dose hepatitis B vaccine, Heplisav-B, in November. Heplisav-B is the first FDA-approved hepatitis B vaccine in 25 years.

A dial indicating high profit levels.

Image source: Getty Images.

So what

As a more convenient and effective option compared with the currently approved hepatitis B vaccines on the market from GlaxoSmithKline and Merck, Heplisav-B is forecast to eventually become the market share leader. As such, it has the potential to generate between $500 million and $600 million in sales.  

Now what

Heplisav-B may not get off to a particularly roaring start, however. The company, after all, lacks the experience and financial resources necessary to compete on even-footing against either Glaxo or Merck. In fact, Wall Street's consensus estimate has Heplisav-B generating a rather meager $53 million in sales this year.

Investors were thus hoping to get word of a lucrative licensing deal -- or perhaps an outright acquisition -- before the vaccine's scheduled launch in the first-quarter of 2018. So far, though, there doesn't seem to be that much interest in Dynavax or its newly approved hepatitis B vaccine from Big Pharma.

A potential deal, therefore, seems to hinge on how well Dynavax handles the vaccine's initial launch. But the odd twist is that if Heplisav-B exceeds expectations, Dynavax may no longer be willing to entertain a licensing deal.    

As there's no way to tell how this pivotal commercial launch will unfold, however, risk-adverse investors may want to take a wait-and-see approach with this early commercial-stage biotech. A slow start, after all, could result in an emotionally charged sell-off that largely ignores Heplisav-B's long-term commercial prospects.  

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.