Dynavax Technologies Corporation (NASDAQ:DVAX)
Shares of Dynavax Technologies Corporation (NASDAQ:DVAX) dropped 11.06% as investors reacted to the U.S. Food and Drug Administration raising safety concerns over its Hepatitis B Vaccine, Heplisav-B. Clinical trial results indicate that while the vaccine was effective, it was associated with more deaths compared to a rival product.
Heplisav-B Safety Concerns
Serious heart problems on patients using the vaccine compared to those taking GlaxoSmithKline plc (ADR)(NYSE:GSK)’s Engerix-B is another concern that continues to rattle regulators. The results indicate that the vaccine might be riskier even though it proved to be effective in some cases.
Heplisav-B is designed it improves the body’s immune response to hepatitis B virus. The vaccine’s fate now lies in the hands of a panel of experts who are set to review it. While the FDA final decision is not bound by the Panel’s recommendation, its final decision will depend on the outcome of the review.
Dynavax Technologies Corporation (NASDAQ:DVAX) felt the wrath of the street on growing concerns that FDA could deal Heplisav-B a big blow following the advisory panel review. The agency has twice rejected the product in the past, citing safety concerns. Late last year the stock plunged 70% after the regulator rejected an approval bid.
Taking into consideration previous rulings JP Morgan Analyst, Anupam Rama, believes the vaccine stands a 40% chance of gaining the much-needed approval. The optimism is because the vaccine has proved to be effective and highly robust amidst safety concerns. Efficacy is not expected to be an issue given the low numbers and rates of cardiac events.
Dynavax Technologies Corporation (NASDAQ:DVAX) on its part argues that the high numbers of heart problems with the use of Heplisav-B were due to fewer than expected instances in the group that used Engerix-B.
“While the finding could be attributable to chance, I cannot confidently say that there is no increased cardiovascular risk with Heplisav,” said one cardiologist consulted by the FDA.
The FDA could require Dynavax Technologies Corporation (NASDAQ:DVAX) to carry out a post marketing monitoring program on approving the vaccine
Dynavax Technologies Corporation (NASDAQ:DVAX) fate in the market hinges on the outcome of FDA ruling on the Hepatitis B vaccine. Some biotech analysts believe the stock could rise by as much as 300% on the vaccine gaining regulatory approval. However, the stock could hit lower lows in the market should the opposite turn out to be true.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.