Who wouldn't love a stock that has more than doubled in a little over five months? That's exactly what Dynavax Technologies (DVAX -2.89%) has done, thanks partially to good news in April for its COVID-19 vaccine partner Valneva.
Dynavax announced its first-quarter results after the market closed on Thursday. Its momentum seems likely to continue, with the biotech stock rising nearly 6% in after-hours trading. Here are the highlights from Dynavax's Q1 update.
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By the numbers
Dynavax reported revenue in the first quarter of $83.3 million. This was more than seven times greater than the company's revenue of $10.9 million in the prior-year period. It also trounced the Wall Street consensus estimate of $59.1 million.
The company announced net income in the first quarter of $891,000, or $0.01 per share, based on generally accepted accounting principles (GAAP). That was a lot better than the GAAP net loss of $12.6 million, or $0.25 per share, posted in the prior-year period. And it beat the average analyst estimate of a net loss of $0.02 per share.
Dynavax ended the first quarter with cash, cash equivalents, and short-term investments of $232.7 million. This reflected a solid increase from the $165 million on hand as of Dec. 31, 2020.
Behind the numbers
The big story for Dynavax in Q1 was the collaboration for its vaccine adjuvant CpG 1018. Dynavax recorded $74.6 million in net product revenue for the adjuvant. It didn't make a penny from CpG 1018 in the first quarter of 2020.
There was good news and bad news in the first quarter for the company's hepatitis B vaccine Heplisav-B. The bad news was that sales fell 21% year over year to $8.3 million due to reduced utilization stemming from the COVID-19 pandemic. The good news was that the market share for Heplisav-B in targeted accounts jumped to 27% from 21% in the prior-year period.
As you might expect with increased manufacturing costs for Cpg 1018, Dynavax's spending rose quite a bit in the first quarter of 2021, compared to the same period in 2020. However, total operating expenses didn't grow nearly as fast as revenue did, leading to the company's impressive bottom-line improvement.
Looking ahead
Dynavax CEO Ryan Spencer said that the company "believe[s] 2021 will be a transformational year." That could very well be the case.
The biotech's collaboration partners should report clinical results throughout 2021. CpG 1018 could prove to be a growth driver not just this year but well into the future. It's being used as an adjuvant not only for COVID-19 vaccines, but also for pertussis and flu vaccines.
Heplisav-B appears to be on track to become the standard of care for hepatitis B vaccination in the U.S. Dynavax also plans to launch the vaccine in Europe in the fourth quarter.
