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Wider-than-Expected Loss at Dynavax

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Dynavax Technologies Corporation (DVAX) suffered a loss of 11 cents per share in the first quarter of 2013, wider than the Zacks Consensus Estimate of a loss of 10 cents per share but flat year over year.

Dynavax reported revenues of $2.1 million, down 11.3% from a year ago but marginally beating the Zacks Consensus Estimate of $2 million.

Collaboration revenues came in at $0.8 million, down 5.0% from the year-ago quarter. Grant revenue from Dynavax’s contract for adjuvant development awarded by the National Institutes of Health declined 30.1% to $0.8 million from the prior year.

Research and development expenses came in at $14.2 million in the first quarter of 2013, up 14.2% driven primarily by the purchase of components for candidate Heplisav along with increase in severance expenses.

General and administrative expenses came in at $8.8 million, a significant jump of 52% from the first quarter of 2012. Incremental severance expenses contributed to the increase.

Dynavax is developing Heplisav, in collaboration with GlaxoSmithKline (GSK). We note that Heplisav is currently under review in the US and Europe.

In Feb 2013, Dynavax received a setback in its efforts to get the candidate approved in the US. The US Food and Drug Administration (:FDA) issued a Complete Response Letter to the company refusing to approve Heplisav in patients in the age group 18-70 without further evaluation of safety.

Dynavax intends to meet the FDA in Jun 2013 to discuss the steps necessary to get the candidate approved. Apart from Heplisav, Dynavax is also developing AZD1419, for the treatment of asthma, in partnership with AstraZeneca (AZN).

Dynavax carries a Zacks Rank #3 (Hold). Right now, Anika Therapeutics Inc. (ANIK) looks well placed with a Zacks Rank #1 (Strong Buy).

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