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Wider Q4 Loss at Dynavax

Zacks Equity Research

Dynavax Technologies Corporation (DVAX) reported a loss of 9 cents per share in the fourth quarter of 2013, wider than the Zacks Consensus Estimate of a loss of 7 cents. The loss reported in the year-ago quarter was 11 cents per share.

Dynavax reported revenues of $2.9 million, up 57.6% from the year-ago period and surpassed the Zacks Consensus Estimate of $2 million.

Quarter In Detail

Collaboration revenues came in at $1.6 million, up 56.7% from the year-ago quarter.

Grant revenue from Dynavax contract for adjuvant development awarded by the National Institutes of Health grew 70.8% to $1.3 million from the year-ago quarter.

Research and development expenses declined 3.1% to $12.1 million in the fourth quarter of 2013. General and administrative expenses declined 60.2% to $3.7 million.

2013 Results

Revenues in 2013 came in at $11.2 million, easily surpassing the Zacks Consensus Estimate of $10.0 million and up 15.8% from 2012. Loss per share came in at 38 cents, wider than the Zacks Consensus Estimate of 36 cents but narrower than the 2012 loss of 41 cents per share.

Our Take

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

Last month, Dynavax announced that it has withdrawn its Marketing Authorization Application (MAA) for Heplisav as the Day 180 List of Outstanding issues provided by the European Medicines Agency (:EMA)  suggested that the current safety database for Heplisav is too small to rule out a risk of less common serious adverse events.

Dynavax plans to initiate a trial, HBV-23, on Heplisav in 2014 to provide a safety database sufficient to support licensure.

We remind investors that Dynavax suffered a setback in Jun 2013 when the U.S. Food and Drug Administration (:FDA) asked for additional safety data in response to a meeting with the agency to discuss the complete response letter (CRL) received earlier in 2013 on Heplisav.

The phase III study, HBV-23 (n=8,000), is planned to provide a sufficiently-sized safety database to the FDA to complete its review of Biologic License Application (:BLA). 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.

We were disappointed by the CRL issued by the FDA. Since Dynavax does not have any other approved product in its portfolio, we expect investor focus to remain on Heplisav updates in the near term.

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.

Dynavax carries a Zacks Rank #2 (Buy). Right now, Biogen Idec (BIIB) also looks well placed with a Zacks Rank #1 (Strong Buy).

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