What happened
A positive analyst take on Dynavax Technologies' (DVAX -0.68%) stock lit the biotech company's shares on fire Tuesday. While many other stocks traded down on the day, Dynavax soared more than 5% higher on the back of that bullish review.
So what
The enthusiastic analyst is JMP Securities' Roy Buchanan, who initiated coverage on Dynavax stock early Tuesday morning. Buchanan's recommendation is market outperform (buy, in other words) at a price target of $22 per share. Even after the resulting price pop, that's still more than double the stock's current level.
Dynavax's star product line these days is its adjuvant technology. Adjuvants are substances that essentially amplify the effect of vaccines, and as such are extremely helpful at times like now when vaccines are critically important to the world.
Referring to the adjuvant that helps power coronavirus jabs, Buchanan wrote in his initial Dynavax note that "The arrival of COVID-19 provided a bolus of cash from partners seeking to safely boost immunogenicity in a range of underlying vaccine technologies, as well as further validation of the benefits of CpG 1018 as an adjuvant."
Now what
Surely bearing in mind that coronavirus cases, hospitalizations, and deaths have been falling consistently of late, Buchanan remains quite bullish on Dynavax's future regardless. He points out that "less-risky cash flows" will derive from the biotech's adjuvants being used in other vaccines, especially its own approved Heplisav-B hepatitis B shot.
As we're hopefully entering a post-COVID pandemic period, coronavirus stock investors have become increasingly concerned that such companies can effectively transition to the treatment or prevention of other afflictions. The JMP Securities prognosticator is clearly convinced Dynavax can do so, and on Tuesday the market seemed to be convinced by his argument.
