What happened

Shares of Dynavax Technologies (DVAX 4.06%) were jumping 7.1% higher as of 3:38 p.m. EDT on Thursday. The gain came after Valneva reported positive initial results from the first part of a phase 1/2 clinical study evaluating its COVID-19 vaccine candidate VLA2001. This experimental vaccine uses Dynavax's CpG 1018 adjuvant.

So what

Valneva tested three doses of VLA2001 in the phase 1/2 study. The company reported especially encouraging results for the high dose of its COVID-19 vaccine candidate. All participants in the study who received the high dose developed significant levels of IgG antibodies to the SARS-CoV-2 virus spike protein.

Hand holding vaccine vial and syringe with scientists and a microscope in the background

Image source: Getty Images.

Dynavax's CpG 1018 adjuvant almost certainly played a key role in those great results. CEO Ryan Spencer said, "We are excited to see the positive results Valneva has generated with their inactivated vaccine using Dynavax's CpG 1018 adjuvant." He added, "We believe the effect delivered by our CpG 1018 adjuvant combined with Valneva's existing manufacturing process for whole virus inactivated vaccines will result in an important option in the global fight against COVID-19."

Now what

Valneva now plans to advance its COVID-19 vaccine into a pivotal late-stage clinical study by the end of this month, pending regulatory approval. This could bode well for Dynavax. Positive results from the late-stage study would provide an even bigger catalyst for the biotech stock.