Dynavax Reports In Line Q1 Results

Zacks

Dynavax Technologies Corporation (DVAX) reported a loss of 5 cents per share in the first quarter of 2014, in line with the Zacks Consensus Estimate. The loss reported in the year-ago quarter was 11 cents per share.

Dynavax reported revenues of $3.5 million, up 67.8% from the year-ago period and was in line with the Zacks Consensus Estimate.

Quarter In Detail

Collaboration revenues came in at $2.4 million, up 168.7% from the year-ago quarter. The increase in revenues was primarily due to the recognition of revenue under Dynavax' collaboration agreement with AstraZeneca (AZN).

We note that Dynavax is developing AZD1419 for the treatment of asthma, in partnership with AstraZeneca.

Grant revenue increased 48.0% to $1.1 million from the year-ago quarter.

Research and development expenses declined 6.6% to $13.2 million in the first quarter of 2014. General and administrative expenses declined 52.8% to $8.8 million.

Our Take

First quarter results came in line with estimates. We remind investors that Dynavax is developing a hepatitis B vaccine, Heplisav, for adults. Heplisav is currently under review in the U.S. and Europe.

However, Heplisav's road to approval has been bumpy. Dynavax has received setbacks both in the U.S. and Europe in getting Heplisav approved.

In Apr 2014, Dynavax commenced a new phase III study (HBV-23) on Heplisav. HBV-23 is a large safety and immunogenicity study, which is designed to address the complete response letter (CRL) issued by the U.S. Food and Drug Administration (:FDA) in Feb 2013. The phase III study will evaluate the overall safety and immunogenicity of Heplisav as compared to GlaxoSmithKline’s (GSK) Engerix-B in adults in the age group of 18 to 70 years.

This study will provide safety database that will be adequate to support licensure. The study is expected to complete enrolment by the end of 2014 with follow-up expected in the fourth quarter of 2015.

In Feb 2014, Dynavax withdrew its Marketing Authorization Application (MAA) for Heplisav as the Day 180 List of Outstanding issues provided by the European Medicines Agency (EMA.TO) suggested that the current safety database for Heplisav was too small to rule out a risk of less common serious adverse events.

Dynavax carries a Zacks Rank #3 (Hold). Right now, Gilead Sciences (GILD) looks well placed with a Zacks Rank #1 (Strong Buy).

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