Dynavax has had a bad 7 months. In November its share price tumbled after FDA advisers suggested its hepatitis B vaccine needed more data to support approval. FDA rejection followed in February, sending shares down still further. Now the stock has dropped for a third time.
Another FDA decision was behind the latest drop, which saw Dynavax ($DVAX) shares close down 43% on Monday. The U.S. regulator asked for more data to support Heplisav, the hepatitis B vaccine Dynavax is trying to bring to market. Observers had expected the FDA to approve Heplisav for use in a subpopulation of hepatitis B patients next year. Instead, the FDA wants a wider study to check the safety of the vaccine.
This will take time and cash. "We project a 2016 Heplisav launch and that Dynavax must spend over $300 million in R&D prior to Heplisav's approval," Cowen and Co. analyst Phil Nadeau wrote in a note seen by Reuters. If it succeeds in the clinic, the extra safety data could see Heplisav approved for use in all hepatitis B patients, instead of just a subpopulation. Talking to Bloomberg, Dynavax Chief Business Officer Michael Ostrach said the ability to pursue a full label is the "silver lining" of the FDA ruling.
Investors struggled to see much of a silver lining and sent Dynavax shares tumbling yet again. In the past 12 months, Dynavax shares are down by almost two-thirds. The next inflection point will arrive in the coming weeks to months when Dynavax updates on the design of a trial to capture more safety data. In November, FDA advisers suggested studying 8,000 to 10,000 patients using the vaccine, and Dynavax CEO Eddie Gray said a clinical trial roughly consistent with this scale is possible, Reuters reports. The need for such a trial would push back the date when Heplisav can begin challenging GlaxoSmithKline's ($GSK) Engerix-B and Merck's ($MRK) Recombivax HB for market share.