Why Dynavax Technologies Shares Crashed 32% Today
Image source: Getty Images.
What happened
After the Food and Drug Administration announced earlier today that it had canceled an advisory committee meeting to evaluate its hepatitis B vaccine, shares in Dynavax Technologies Corp. (NASDAQ: DVAX) dropped 31.6% by market close.
So what
Dynavax Technologies' investors were dealt a blow in April when the FDA opted to delay an approval decision on Heplisav-B, the company's hepatitis B vaccine, and the FDA dealt another blow to the company today when it canceled the advisory committee meeting scheduled to consider the vaccine.
In August, Dynavax Technologies reported that the FDA's Vaccines and Related Biological Products committee would debate Heplisav-B's pros and cons on Nov. 16, yet only weeks later, the FDA has determined it needs more time "to review and resolve several outstanding issues."
The cancellation puts in jeopardy the FDA's ability to issue an approval decision on Heplisav-B's Dec. 15 PDUFA date.
Now what
The FDA did say that its evaluation is continuing and that it would schedule another advisory committee in the future, so this could simply be a delay and not an indication that the FDA has found something new and worrisome in the Heplisav-B data it's reviewing. The FDA previously rejected Heplisav-B, in 2013, because of worry that it could cause autoimmune disorders.
If Heplisav-B does eventually make it across the finish line to market, the opportunity could be big, because it offers an arguably better dosing schedule than GlaxoSmithKline's Engerix-B, the leading hepatitis B vaccine. Heplisav-B is given via two doses in one month, while Engerix-B is given via three doses over six months.
Nevertheless, Heplisav-B's past FDA setbacks make this company too risky for me to buy. Instead, I'm content to focus on other ideas that may be less risky.
A secret billion-dollar stock opportunity The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.
Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. Like this article? Follow him on Twitter where he goes by the handle @ebcapital to see more articles like this.
The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.