What happened

Dynavax Technologies (NASDAQ:DVAX), a small-cap vaccine company, saw its shares lose a noteworthy 17.2% of their value in June, according to data from S&P Global Market Intelligence. What went wrong for the biotech last month?

Dynavax's shares have been in free fall ever since the company announced a strategic restructuring designed to prioritize the commercialization of its FDA-approved hepatitis-B vaccine known as Heplisav-B, as well as the sudden retirement of CEO Eddie Gray slated to go into effect on Aug. 1, 2019. In fact, the biotech's shares have dropped by an eye-catching 30% since these two material events became public knowledge on May 23, 2019.

Black and white chalkboard chart showing a downward-trending arrow.

Image Source: Getty Images.

So what

Dynavax's restructuring effort effectively signals the end of the biotech's foray into immuno-oncology. Wall Street, in turn, rightfully frowned upon this disappointing development for two interrelated reasons. Namely, Heplisav's commercial launch has been painfully slow, leading investors to place a heavy emphasis on the company's immuno-oncology pipeline as a key source of future value creation. Driving this point home, Heplisav's annual sales are on track to fall well short of $50 million this year, which is a far cry from the company's peak sales estimate of $500 million per year.

Now what

On the bright side, Wall Street has Heplisav's sales picking up in a big way starting next year, perhaps making Dynavax a compelling bargain buy at these levels. As things stand now, the biotech's shares are trading at a fairly reasonable 3.1 times the company's projected 2020 revenue. That's not a ridiculously cheap valuation, but it is below average for a biotech with a fairly new product on the market. So while a lucrative immuno-oncology partnership no longer appears to be in the cards, Dynavax's stock might be worth considering after this steep drop-off due to the simple fact that Heplisav is slowly but surely gaining market share.