What happened

Shares of Dynavax Technologies (NASDAQ:DVAX), a vaccine and immuno-oncology specialist, dropped by 15.9% last month, according to data from S&P Global Market Intelligence. What sparked this sell-off?

Dynavax's stock tanked after the company reported its fourth-quarter and full-year results toward the end of February. While the biotech actually beat Wall Street's consensus estimate on revenue for the fourth quarter, investors were apparently hoping the company would announce a partnering deal in immuno-oncology revolving around the TLR9 agonist SD-101. Unfortunately, management only noted during the accompanying conference call that the company is "in discussions with a number of pharmaceutical companies to explore the broadening and deepening of our immuno-oncology clinical program."  

Businessman appearing to panic while staring at a downward trending series of bar graphs held by a pair of giant hands.

Image source: Getty Images.

So what

Dynavax has been burning through about $40 million per quarter over the last year. At that rate, the company will probably be forced to issue a large secondary offering before the end of 2019 -- that is, unless it can attract a deep-pocketed partner to help pay for the development of its immuno-oncology pipeline.  

Now what

Dynavax's decision not to issue a revenue projection for 2019 also didn't help matters. Since its hepatitis vaccine, Heplisav-B, could extend the biotech's cash runway by perhaps a whole quarter if Wall Street's more optimistic estimates are correct, investors clearly wanted the company to roll out some type of forward-looking sales projection for this product. Instead, management decided to play it safe and simply say that Heplisav-B should be "profitable" by year's end. 

All told, Dynavax's main value drivers -- Heplisav-B and its immuno-oncology pipeline -- are both making steady progress and that fact should reassure shareholders. But this early commercial-stage biotech stock is likely to remain volatile until the company's long-term capital needs are met.