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What happened

Following news that the FDA has rejected the company's hepatitis B vaccine, shares in Dynavax Technologies Corp. (NASDAQ:DVAX) are tumbling 63% at 2:30 p.m. Monday.

So what

Dynavax Technologies' investors were hoping that a large trial conducted by the company following the FDA's rejection of Heplisav-B in 2013 would clear the way for Heplisav-B to make it to market this year, but the agency dashed those hopes on Monday when it rejected Heplisav-B for a second time.

The FDA's decision on Heplisav-B isn't a total surprise. In April, the FDA asked the company for additional information that pushed back the agency's decision timeline from September to December, and in August, the FDA cancelled a key advisory committee meeting that would have discussed the company's application in more depth.

Dynavax's management thinks that it can provide requested information to the agency that supports a resubmission of its Heplisav-B application, but management doesn't appear confident that it's something they can do without some help from a deep-pocketed peer.

"The CRL is consistent with our opinion that HEPLISAV-B is approvable and we are seeking to meet with the FDA as soon as possible," said Eddie Gray, chief executive officer of Dynavax. "However, the time and resources that will be required to gain approval leads us to consider that we may not be able to advance this program on our own and we are moving swiftly to identify a potential pharmaceutical or financial partner."

Now what

The FDA is requesting "information regarding several topics, including clarification regarding specific adverse events of special interest (AESIs), a numerical imbalance in a small number of cardiac events in a single study (HBV-23), new analyses of the integrated safety data base across different time periods, and post-marketing commitments."

The grocery list of requested items did include an admission by the agency that it has yet to get all the way through information provided by Dynavax in October. Included in that information was additional insight into the AESI and cardiac events questions.

While the agency may have some of the information it needs already, management's statement that they're seeking a partner suggests there's enough work to be done that there's still significant uncertainty over this drug's future. Since Heplisav-B has suffered multiple confidence-busting stumbles, there's little reason for investors to take on the risk of hoping for a different outcome in the future. For that reason, focusing on other money making ideas may be the smartest move.

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