William Blair Remains Positive on Dynavax Technologies Corporation (DVAX) Despite FDA VRBPAC Meeting Cancellation

Dynavax Technologies Corporation (NASDAQ:DVAX) shares have tumbled recently on the heels of last Friday’s FDA announcement of the cancellation of the November 16, 2016 Vaccines and Related Biological Products Advisory Committee (VRBPAC) meeting for hepatitis V (HPV) vaccine Heplisav. The FDA reasons that this should allow the necessary time needed to “review and resolve several outstanding issues,” but promising every intention to “continue evaluating and will schedule an Advisory Committee meeting in the future, as needed.”

Nonetheless, William Blair analyst Y Katherine Xu reiterates an Outperform rating on DVAX with a price target of $45, which represents a nearly 258% increase from where the shares last closed.

Xu explains, “Our conversations with company management led to clarification of the situation, and we believe this action from the agency is a net positive for Dynavax. As a result, we maintain our Outperform rating and recommend buying on weakness.”

As it turns out, when the company asked the agency to clarify as to which key issues were of concern and to be debated at the upcoming VRBPAC panel, the FDA in response decided to cancel the panel altogether, instead opting to work together on the issues that remained “via the normal process.”

Ultimately, “We estimate the probability of commercialization for Heplisav of 90%. We maintain our estimate for a Heplisav launch in the United States in fourth quarter 2016 in the full adult population, with $600 million in peak sales eight years into launch. We expect potential approval in Europe to occur in 2019 after post-marketing studies to expand the safety database. Our $45 price target includes $44 per share for the Heplisav franchise and $1 in net cash by midyear 2017; all other pipeline candidates, including SD-101, remain upside to our valuation,” the analyst concludes.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, three-star analyst Y Katherine Xu is ranked #1,332 out of 4,147 analysts. Xu has a 45% success rate and yields 3.7% in her yearly returns. When recommending DVAX, Xu realizes 19.4% in average profits on the stock.

TipRanks analytics indicate DVAX as a Buy. Based on 3 analysts polled in the last 3 months, 2 rate a Buy on DVAX, while 1 maintains a Hold. The 12-month average price target stands at $30.50, marking a 143% upside from where the stock is currently trading.Screen Shot 09-08-16 at 05.53 PM


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