William Blair Maintains Outperform On Dynavax Following Initiation Of Phase I/II Study In B-cell Lymphoma

In a research report issued today, William Blair analyst Katherine Xu maintained an Outperform rating on Dynavax Tech. (NASDAQ:DVAX) with a $4 price target, following the company’s announcement that it has initiated a Phase I/II study, LYM- 01, evaluating SD-101 in patients with untreated low-grade B-cell lymphoma.

Xu wrote, “SD-101 is a wholly owned, second-generation Toll-like receptor 9 (TLR9) agonist that stimulates the innate immune system to recognize and target cancer cells. The activation of the immune system causes the release of type I interferons, which stimulate macrophages and natural killer cells to attack tumor cells. When injected locally into a lesion, it is hypothesized that the immunomodulatory effects of SD-101 will target tumor cells systemically.” The analyst continued, “The multicenter study, LYM-01, will be testing the safety and efficacy of SD- 101 in 25 patients with untreated, low grade B-cell lymphomas who are candidates for the “watch and wait” approach and do not yet require systemic therapy. The five weekly intratumoral injections of SD-101 at doses of 1, 2, 4, or 8 mg will be given subsequent to local radiation over two days. The primary objectives of the study will be safety, pharmacodynamics (interferon-inducible genes in whole blood 24 hours after injection), and maximum tolerated dose (MTD) or optimal dosing. A key secondary endpoint will be objective response to therapy in distant untreated lesions. We expect to see results of the trial as they become available due to its open-label design throughout 2015 into 2016.”

The analyst believes that key catalysts for DVAX’s stock are, “1) the first of three DSMB safety assessments of the Phase III HBV-23 study of vaccine Heplisav in hepatitis B during fourth quarter 2014; 2) top-line data from the Phase I IST study evaluating SD-101 in relapsed lymphoma patients anticipated in late 2014 or early 2015; 3) the second of three DSMB safety assessments of the Phase III HBV-23 study expected in first half 2015; 4) the third of three DSMB safety assessments of the Phase III HBV-23 study expected in second half 2015; 5) proof-of-concept data for AZD1419 in asthma expected during second half 2015; and 6) top-line results from the HBV-23 study expected in fourth quarter 2015.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Y Katherine Xu has a total average return of -5.9% and a 32% success rate. Xu has a -3.7% average return when recommending DVAX, and is ranked #2934 out of 3343 analysts.

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