Dynavax Triumphs With Heplisav-B: Now What?

Summary

• Dynavax’s Hepatitis B vaccine, Heplisav-B, received FDA approval after hours on Nov. 9th.
• There will be no restrictive label; label will show Heplisav-B’s superior efficacy to market leader, Engerix-B.
• With commercial launch set for Q1 2018, Dynavax is ramping up sales and marketing capabilities; it has sufficient supply for 2018.
• The company hasstated that it intends to pursue commercialization on its own and that anypartnership would have to be very substantial to change that course.
• Investors mustwatch closely as Dynavax makes the sometimes fraught transition from researchcompany to commercial entity.

Longtime investors in Dynavax Technologies (NASDAQ:DVAX) could be forgiven for not wanting to think about the future. After years of false-starts and FDA rejections, the company was at last able to announce on November 9th that its innovative Hepatitis B vaccine, Heplisav-B, had received FDA approval. Those who have been along for the ride since before the last crash in 2016, and even those who have ridden the sometimes chaotic wave this year (I admit I was a latecomer, only getting onboard in January 2017), probably deserve a celebratory drink or three.

Clearly, not everyone held their nerve: Trading volume during the Thursday session reached 3.2 million (versus an average daily volume of 1.8 million) and the stock price fell nearly 4% from the previous day's close, at $20.05 a share. Holding through a binary event can be very taxing on an investor's nerves. Those who did have been rewarded: Shares climbed past $23 early in after-hours trading. It was a true triumph.

Yet, while investors bask in the well-earned euphoria of ultimate vindication, we must now look to the future. A press release (and subsequent conference call) gave the first substantive insights into what the next phase will look like for DVAX and its newly minted commercial vaccine. Let's take a look at what happened and where DVAX is headed as it transforms into a commercial enterprise.

Read the Label

While approval had seemed like a slam dunk, especially after a resounding endorsement from an FDA advisory committee in July, having faith in the FDA to do the right thing is a dangerous business. More than a few nasty surprises have been given out to seemingly excellent drugs, and some seriously dodgy products have been given the green-light on occasion.

Yet for all the nagging concerns about the FDA

Analyst’s Disclosure:I am/we are long SGYP, DVAX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.