Please ensure Javascript is enabled for purposes of website accessibility

Why Dynavax Technologies Stock Is Sliding Today

By George Budwell – Oct 1, 2021 at 11:27AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A possible oral COVID-19 treatment is weighing on the shares of vaccine markers like Dynavax today.

What happened

Dynavax Technologies (DVAX 1.45%), a small-cap vaccine and immunotherapy company, is having another volatile day. Shares of the vaccine specialist are down by an eye-popping 17% as of 10:38 a.m. EDT Friday morning.

The biotech's shares are on a wild ride yet again because of news from pharma titan Merck (MRK -0.72%). Merck and its partner Ridgeback Biotherapeutics reported that their oral antiviral pill slashed hospitalization rates in adult COVID-19 patients by half. What's more, the duo noted that no patients on the drug died in the study. Eight people in the placebo component of the trial passed away. 

A businessman looking away from a downward trending graph.

Image source: Getty Images.

So what

Dynavax is collaborating with multiple vaccine developers on responses to the COVID-19 pandemic. Specifically, the biotech has several partnering agreements with various biopharmas regarding its adjuvant CpG 1018, a key component that boosts the effectiveness of a vaccine. Prior to this news, Dynavax was estimating between $300 million and $400 million in 2021 aggregate revenue from its partnership agreements over CpG 1018. This Merck news may not affect the company's near-term revenue estimate. But investors are backing away from nearly all COVID-19 vaccine developers today because of the possible financial ramifications of a drug like Merck's. 

Now what

Should bargain hunters take advantage of Dynavax's double-digit pullback today? I think the answer is yes. It will take Merck and its partner a while to get this drug to market (at least several weeks). And vaccines aren't going to take a monstrous hit from the advent of an oral antiviral. This pill will likely be indicated -- at least initially -- for newly diagnosed patients who have been hospitalized, not the general population. Therefore, biotech investors are probably overreacting to this news today.  

The Motley Fool has no position in any of the stocks mentioned. George Budwell has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Nearly 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Dynavax Technologies Stock Quote
Dynavax Technologies
DVAX
$12.59 (1.45%) $0.18
Merck & Stock Quote
Merck &
MRK
$109.33 (-0.72%) $0.79

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
371%
 
S&P 500 Returns
120%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.