What happened
Shares of immuno-oncology and next-generation vaccine-maker Dynavax Technologies Corporation (DVAX +0.00%) lost 10.5% of their value in September, according to data from S&P Global Market Intelligence. What went wrong for the drugmaker last month?
Dynavax's shares have been in full pullback mode since mid-year due to the weaker-than-expected launch of its hepatitis B vaccine, Heplisav-B. In short, investors were clearly hoping the vaccine would get off to a red-hot start based on its sizable commercial opportunity, but so far, that expectation has yet to materialize. In the second quarter, for example, Heplisav-B raked in a paltry $1.3 million in sales, bringing its grand total for the year to a whopping $1.5 million.
Image source: Getty Images.
So what
Because Heplisav-B requires fewer doses and is reportedly more potent than GlaxoSmithKline's (GSK 0.24%) market-leading Engerix-B, investors seem to have gotten the impression that the vaccine's commercial launch would be smooth sailing right out of the gate. The unfortunate reality, though, is that this is Dynavax's first commercial launch of any kind, and it takes time to build relationships with key opinion leaders, third-party payers, and physicians.
Stated simply, this somewhat anemic commercial launch shouldn't come as a total surprise to shareholders -- especially given that the Dynavax is competing directly against an industry heavyweight in GlaxoSmithKline.
Now what
The good news is that Heplisav-B's sales are expected to accelerate in a big way heading into 2019. Wall Street, for instance, believes the vaccine will haul in somewhere between $80 million to $98 million in sales next year. And if this rosy forecast comes true, Dynavax's shares should reverse course in short order, perhaps making this beaten-down biotech an incredible bargain at current levels.
