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Why Dynavax Technologies Stock Marched Higher in January

George Budwell, The Motley Fool

What happened

After a rather tumultuous 2018 campaign, shares of Dynavax Technologies (NASDAQ: DVAX) regained their footing last month by gaining a noteworthy 20.4%, according to data from S&P Global Market Intelligence. The catalyst?

Dynavax's shares bounded higher after the company's J.P. Morgan Presentation early in the month. The key news item emanating from this presentation was the announcement that Heplisav-B's commercial launch picked up in a big way during the fourth quarter of 2018. Heplisav-B is a vaccine indicated as a preventative measure against hepatitis B infection in adults 18 and older. 

Drawing of a rocket appearing to blast off from a person's open hand, set against a dark, cloudy background.

Image source: Getty Images.

So what

Turning to the specifics, Dynavax announced during its J.P. Morgan presentation that Heplisav-B's fourth-quarter sales would come in at "no less than $3.7 million." While a grand total of $3.7 million might not seem like a whole lot in absolute terms, this quarterly haul does represent a healthy 27.5% sales jump compared with the entirety of the prior nine-month period. Heplisav-B thus appears to be gaining traction after an initially slow start. 

Now what

The good news is that Heplisav-B's commercial launch should only continue to gain momentum from here on out. As proof, Wall Street's current consensus estimate has the vaccine's sales rising by a staggering 911% this year.

The downside, though, is that Dynavax's shares are now trading at approximately 10.3 times the company's projected revenue haul for 2019. That's among the richest valuations within the small-cap biotech landscape at the moment. As a result, investors may want to take a cautious approach with this red-hot biotech stock following this monstrous January rally. 

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George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.