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Dynavax Reports In-Line Loss, Beats Rev

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Dynavax Technologies Corporation (DVAX) reported a loss of 9 cents per share in the third quarter of 2013, in line with the Zacks Consensus Estimate, but narrowed from the year-ago loss of 10 cents per share.

Dynavax reported revenues of $2.9 million, up 1.8% from the year-ago period and surpassing the Zacks Consensus Estimate of $2 million.

Collaboration revenues came in at $1.1 million, up 5.7% from the year-ago quarter.

Grant revenue from Dynavax contract for adjuvant development awarded by the National Institutes of Health grew 39.4% to $1.7 million from the year-ago quarter.

Research and development expenses declined 8.4% to $11.8 million in the third quarter of 2013. General and administrative expenses declined 18.4% to $5.8 million.

We remind investors that Dynavax is developing a hepatitis B vaccine for adults – Heplisav, which is currently under review in the U.S. and Europe.

Last month, Dynavax received encouraging news when the design of its next large-scale clinical study on Heplisav, was finalized following discussions with the U.S. Food and Drug Administration (:FDA).

We note that Dynavax suffered a setback in Jun 2013 when the FDA asked for additional safety data on Heplisav. The company had conducted a meeting with the agency to discuss the complete response letter (CRL) received earlier this year for the Heplisav Biologic License Application (:BLA).

The FDA had then stated that the database needed additional subjects as analyzing the safety profile on the current database would probably lead to an approval for a limited population, thereby preventing additional patients to benefit from the treatment, if approved.

Apart from Heplisav, Dynavax is also developing AZD1419, for the treatment of asthma, in partnership with AstraZeneca (AZN) and DV1179 (autoimmune and inflammatory diseases) with GlaxoSmithKline (GSK).

The third quarter results did not surprise us. We expect investor focus to remain on Heplisav updates.

Dynavax carries a Zacks Rank #4 (Sell). Right now, Actelion Ltd. (ALIOF) looks well placed with a Zacks Rank #1 (Strong Buy).

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