Dynavax Shares Poised To Run Higher As Heplisav Approaches Important Catalysts

| About: Dynavax Technologies (DVAX)
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Dynavax Technologies (NASDAQ:DVAX) is a clinical-stage biopharmaceutical company that discovers and develops novel products to prevent and treat infectious and inflammatory diseases. The FDA has scheduled a Vaccines and Related Biological Products Advisory Committee (VRBPAC) panel to discuss the approvability of Heplisav on November 14-15. Heplisav is Dynavax's phase III adult hepatitis B vaccine that has a scheduled FDA approval (PDUFA) date set for February 24, 2013.

Below are seven reasons I believe Dynavax shares are positioned for an extended run higher.

1) Large Addressable Market - In 2011 the global adult hepatitis B vaccination market was estimated at approximately $700M and growing at nearly 10% per year. Adding to the market - in 2011 the CDC recommended that hepatitis b vaccines should be administered to all unvaccinated adult diabetics aged 18-59 and at age 60 plus at doctors discretion. Consider there are 2M new cases of diabetes in adults aged 20 or older diagnosed every year.

2) Superior To Competition - Currently the adult hepatitis B vaccine market is served by GlaxoSmithKline's (NYSE:GSK) Engerix-B and Twinrex and Merck's (NYSE:MRK) Recombivax-HB. Engerix-B is considered the standard-of-care.

Dynavax has completed four head-to-head phase III studies (5770 patients) of Heplisav against Engerix-B and has safely shown superior seroprotection with fewer doses given in a shorter time frame.

Results For Adults 18-55 Years Old Heplisav Engerix-B
Seroprotection Percentage 95% 81%

Number Of Doses

2 3
Dosing Timeframe 1 Month 6 Months
Results For Adults 40-70 Years Old Heplisav Engerix-B
Seroprotection Percentage 89% 69%
Number Of Doses 2 3
Dosing Timeframe 1 Month 6 Months

If Heplisav is approved by the FDA, based on the above data, it should become the new standard-of-care for hepatitis B vaccines.

3) Europe - Dynavax announced on August 22nd that the European Medicines Agency (EMA) has accepted the filing of the Marketing Authorization Application (MAA) for HEPLISAV in adults aged 18-70.

4) Solid Financial Position - Dynavax currently sits on approximately $160M of cash with no debt with a cash burn rate of around $52M per year. The company completed a stock offering in May for 17.5M shares priced at $4.25 positioning it for the approval, launch, and commercialization of Heplisav.

5) Pipeline Potential - Dynavax has promising drugs in the pipeline in clinical testing including a flu vaccine partnered with Novartis (NYSE:NVS), an autoimmune and inflammation candidate with GlaxoSmithKline, and an asthma/COPD candidate with AstraZeneca (NYSE:AZN).

6) Positive Analyst Sentiment - Analysts are very bullish on Dynavax:

  • William Blair - Outperform, $9 price target
  • MLV & Co - Buy, $10 price target
  • Jeffries, Buy, $6 price target
  • Cowen, Outperform

William Blair assigns a 90% chance of approval as highlighted in a note on August 29th.

7) Upcoming Catalysts - As history has shown time and again - biotechs tend to run higher into important catalysts and binary events such as clinical trial data releases, FDA advisory panels, and FDA approvals. As stated at the beginning of this article, Dynavax has a FDA scheduled VRBPAC panel review for Heplisav coming up on November 14-15. Also, the FDA approval (PDUFA) date for Heplisav is scheduled for February 24, 2013. Given the wealth and depth of positive clinical data, safety, and superior comparison to the current standard-of-care for Heplisav - I believe Dyanavax will continue to run higher into both of these events.

All-in-all I feel Dynavax shares present a very compelling entry point below $5 per share and based on the above seven reasons, I fully expect it to continue its run into 2013.

Disclosure: I am long 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.

Additional disclosure: This article is informational and intended to spur thought and discussion. This article is NOT a substitute for your own extensive due diligence and does NOT qualify as investment advice. Do not buy or sell stocks based on this article. I do not short stocks nor do I invest in options.