For putting up $22 mill, PIPE holders functionally have warrants to pick up 14% of this company if the stock price passes 1.85. This will keep a cap on the stock price. In the SEC filing that outlined this PIPE, I could not find that stock price was a trigger for default, but at 1.16, it sure looked like the market was telling you Oclaro was heading for bankruptcy.
The drop in the stock price of DVAX actually reduces the risk of opening a new position. After three major setbacks in the past 4 years, the lowest the stock price hit was 1.63 during panic selling in 2010. After the most recent, it got to 1.77. At 2.09, the down side risk is -0.3 while the upside potential is +2.9