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Here's Why Dynavax Technologies Fell Again Today

By Cory Renauer - Jul 22, 2019 at 5:13PM

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It took another tumble despite enthusiastic analyst upgrades earlier this month.

What happened

Shares of Dynavax Technologies ( DVAX -3.65% ), a biopharmaceutical company struggling to launch a next-generation hepatitis B vaccine, reached a new low today. Despite investment-bank analyst upgrades earlier this month, the stock fell 8.5% on Monday.

So what

After its attempt to become an oncology drug developer didn't work out, Dynavax recently fell back to plan A. That plan involves circling wagons around Heplisav-B, a two-shot vaccine that works as well as the old vaccine -- which requires three shots spread over a longer time frame.

A downward-sloping chart drawn with chalk

Image source: Getty Images.

Cantor Fitzgerald recently raised some eyebrows by calling the stock a potential five-bagger, citing the need for increased compliance with hepatitis B vaccination -- too many people don't come back for a third dose. After taking a weekend to consider the chances that Dynavax will be able to reach profitability before running out of money again, investors were far less enthusiastic.

Now what

After losing $39.7 million during the first three months of the year, Dynavax finished March with $183 million in cash and securities. If a slimmed-down staff focused on selling Heplisav-B can boost sales of the vaccine from an annualized $23 million to around $100 million in a year or two, Dynavax could start making ends meet.

At recent prices, Dynavax sports a $218 million market cap. That means the stock would skyrocket if the Heplisav-B vaccine approaches its potential. Given the company's track record, though, it probably isn't worth the risk.

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.

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