Dynavax Technologies (NASDAQ:DVAX) lead oncology product candidate SD-101 flashes favorable risk/reward heading into data to be released at two key conferences: American Association for Cancer Research (AACR) and American Society of Clinical Oncology (ASCO); one bull is counting on it.
RBC Capital analyst Brian Abrahams believes this data will be “key” and between SD-101 potential coupled with momentum around Hepatitis B vaccine with “solid […] floor,” there is more than one reason to bet on the drug maker.
As such, confident on these releases of data in the coming weeks and months, the analyst reiterates an Outperform rating on DVAX with a $25 price target, which implies a close to 26% upside from current levels. (To watch Abrahams’ track record, click here)
“Despite recent upside, we like setup for DVAX into upcoming SD-101 data at AACR and ASCO, given 1) low bar in head/neck cancer; 2) evidence of activity from prior ‘101 trials and studies of similar drugs increasing POS; 3) a floor around the mid-teens on Heplisav alone, given long tail; 4) continued tempered Heplisav launch expectations. We anticipate ~20-30% potential upside if data from both trials looks favorable,” explains Abrahams.
“The bar is low in HNSCC, where checkpoint inhibitors have limited activity; we believe a response rate ‡25% for the ‘101 combo would be viewed positively by the Street and indicative of true activity,” continues the analyst, expecting a response rate in a range between 50% and 60% in melanoma at the ASCO conference.
Bottom line, “We believe the totality of the SD-101 data presented last year points to a reasonable likelihood the drug is efficacious and should produce response/durability data in upcoming results reflecting this, though we acknowledge the limitations of interpreting small numbers,” Abrahams concludes, finding the data of different TLR-targeting intratumoral agents bolster the mechanism with “promising data” and the “likelihood of true activity” for DVAX’s oncology asset.
TipRanks shows off this biotech player as one of the strongest stock picks on Wall Street. Out of 5 analysts polled in the last 3 months, 4 are bullish on DVAX stock while just 1 maintains a Hold. The 12-month average price target stands tall at $29.40, marking nearly 47% in return potential for shares.