What happened

Shares of the small-cap biotech Dynavax Technologies Corporation (NASDAQ:DVAX) are poised for a big day today. In pre-market action, the company's shares rose by as much as 43% on heavy volume. Investors are bidding up Dynavax's shares this morning in anticipation of the company's COVID-19 vaccine program update, which is scheduled for later today.

One of the main reasons for all the excitement is that Dynavax has already announced that one or more of its collaboration partners should initiate an early stage COVID-19 vaccine trial by July. Today's meeting will likely provide additional information on the state of these partnerships. 

A doctor holding a bottle containing a COVID-19 vaccine.

Image source: Getty Images.

So what

Dynavax's current plan is to provide its proprietary toll-like receptor 9 agonist adjuvant CpG-1018 -- the same adjuvant used in the company's FDA-approved hepatitis B vaccine, Heplisav B -- to its partners in order to boost the effectiveness of these experimental COVID-19 vaccines. Dynavax should thus be in line to receive a portion of any future grant funding. That's definitely a positive, as several companies have now received sizable grants to develop a vaccine against the deadly respiratory virus. On the flip side, there's also no guarantee that more funding will indeed materialize.  

Now what

Dynavax's shares have been grossly undervalued for a while now. Heplisav-B, after all, should eventually generate several hundred million dollars in peak sales. So if you're buying this biotech stock for its tie-in to the ongoing pandemic, it might be a good idea to stay for the company's real value driver: Heplisav-B's rapidly growing sales.