Dynavax Technologies slumps following 4Q report

Dynavax slides after taking bigger 4th-quarter loss; FDA rejects hepatitis B drug Feb. 25

Associated Press

NEW YORK (AP) -- Shares of Dynavax Technologies Inc. sank Monday after the hepatitis B drug developer posted a larger-than-expected loss in the fourth quarter.

THE SPARK: Dynavax reported its fourth-quarter results Friday afternoon. The company said it lost $20.5 million, or 11 cents per share, as its expenses increased and revenue fell. The Berkley, Calif., company lost $4.3 million, or 3 cents per share, in the fourth quarter of 2011. Revenue fell to $1.8 million from $11.4 million as Dynavax received fewer payments from its drug development partners.

Analysts were expecting a loss of 8 cents per share and $7.7 million in revenue, according to FactSet.

THE BIG PICTURE: Dynavax, which has no approved drugs, announced Feb. 25 that the Food and Drug Administration refused to approve its hepatitis B vaccine Heplisav. The FDA wants Dynavax to provide more information showing Heplisav is safe. Dynavax had hoped to get the drug approved for use in patients age 18 to 70, but it said the FDA favors a more restricted marketing approval.

Within six weeks Dynavax expects to have a meeting with the FDA to discuss the agency's concerns. Its quarterly announcement did not include any further details about that meeting or its proposals to address the FDA's issues.

THE ANALYSIS: Jefferies & Co. analyst Thomas Wei said Dynavax took a bigger loss than he expected, but the company has enough cash to stay in business through a potential approval of Heplisav in 2014. Wei said he thinks Dynavax could make a new, more restricted filing for marketing approval by the end of 2013.

He kept a "Buy" rating on the stock with a price target of $5 per share.

SHARE ACTION: Dynavax shares lost 18 cents, or 9.1 percent, to $1.80 in afternoon trading. The stock is down 37 percent in the year to date.

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