Efficacy Should Be a "Slam Dunk" for Dynavax
Dynavax Technologies Corporation (NASDAQ:DVAX) hepatitis B vaccine Heplisav is nearing the gates of approval, as its August 10th date with destiny, a.k.a. the FDA's Vaccines and Related Biological Products Advisory Committee (VRBPAC) hangs in the wings. William Blair analyst Y Katherine Xu deems 70% probability of approval for the hepatitis B vaccine, and that no matter how the verdict falls, the decision will enable the immune-oncology aspect of the business to set free its true valuation.
Predicting that should Dynavax gain the green light from the FDA, $650 million in peak sales could wait for Heplisav, the analyst reiterates an Outperform rating on DVAX without suggesting a price target. (To watch Xu's track record, click here.)
Xu opines, "Heplisav’s long road to approval should reach its end by August 10, with an FDA panel on July 28 to provide a strong indication of the likelihood of approval. The release of the briefing document on July 26 may affect the stock depending on the content and tone. On a positive outcome, we estimate Dynavax shares to trade above $30 over time, and if negative, the stock could have about 25% downside, since the oncology franchise is providing some floor for the valuation, in our opinion."
Moreover, glancing past prospective approval, "If approved, we believe Heplisav would become standard-of-care in the adult hepatitis B vaccine market, with superior efficacy and an easier dosing schedule as compared with the incumbent Engerix-B (GlaxoSmithKline [GSK $42.42])," continues the analyst.
Ultimately, Xu's conclusion on Dynavax keeps ringing with bullish sentiment, as she contends, "Given the clear superiority in immunogenicity that Heplisav demonstrated over Engerix-B in the overall adult population and in almost all subgroups, we believe the efficacy vote at this panel will be clear cut, and safety will remain the focus of the debate."
Additionally, Simos Simeonidis of RBC Capital rates a Hold rating on DVAX with a $7 price target, marking a nearly 27% downside from where the shares last closed; Phil Nadeau of Cowen rates a Buy on the stock with a $45 price target, marking a 371% increase from where the shares last closed; Michael Yee of Jefferies rates a Hold on the stock with a $4 price target, marking a 58% downside from where the shares last closed; and Anupam Rama of J.P. Morgan rates a Hold on the stock with a $19 price target, marking a nearly 99% increase from where the shares last closed.
