What happened
Shares of Dynavax Technologies (DVAX 0.36%) were up by 11.2% so far this week as of the market close on Thursday. That gain was primarily due to the company's announcement on Wednesday that it had signed an agreement with Clover Biopharmaceuticals under which it will supply its CpG 1018 adjuvant for use with Clover's COVID-19 vaccine candidate, SCB-2019.
So what
Dynavax didn't reveal any financial details of its agreement with China-based Clover. However, the biotech stock rose because investors realized that the deal will likely be quite lucrative.
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Clover announced this week that it secured an advanced purchase agreement with Gavi, the Vaccine Alliance. The Chinese drugmaker will supply up to 414 million doses of SCB-2019 to Gavi through 2022 to be distributed by COVAX, the global initiative dedicated to ensuring that COVID-19 vaccines reach people in less wealthy countries. Clover expects to launch its COVID-19 vaccine by the end of this year.
Now what
CpG 1018 just might be a gold mine for Dynavax. In addition to its agreement with Clover, the company has deals to supply the adjuvant to other COVID-19 vaccine makers. Valneva has kicked off a pivotal late-stage clinical study of its vaccine candidate, while Medigen is testing its experimental vaccine with CpG 1018 as an adjuvant in a phase 2 study.
Dynavax also uses CpG 1018 for its own vaccines. In the fourth quarter, the company expects to report results from a phase 1 study of its Tdap-1018 tetanus, diphtheria, and acellular pertussis booster vaccine that uses the adjuvant. Also in Q4, it will launch the hepatitis B vaccine Heplisav-B, which uses CpG 1018 as well.
