Dynavax (NASDAQ:DVAX), a biopharmaceutical company, is capturing the market’s attention by developing and commercializing novel vaccines. Its flagship product, the Heplisav-B vaccine for hepatitis B, has been approved in the United States for adults aged 18 and over. Although the company recently missed top-and-bottom-line expectations, and its shares have slid by 15% over the past year, its pipeline of candidate treatments shows promising upside potential. So investors looking for a biopharma with long-term potential upside might want to keep their eyes on this high-risk, high-reward option.
Dynavax’s Robust Pipeline
Dynavax is a commercial-stage biopharmaceutical company specializing in developing innovative vaccines to safeguard against infectious diseases. It has two primary commercial products: the HEPLISAV-B vaccine, for the prevention of hepatitis B in adults, approved in the U.S., the European Union, and Great Britain, and the CpG 1018 adjuvant, presently in use in HEPLISAV-B and multiple adjuvanted COVID-19 vaccines.
The HEPLISAV-B vaccine has seen strong growth, with a 10% increase from $43.5 million in the first quarter of 2023 to $47.8 million in 2024. Its market share in the U.S. has also risen, from 37% to 41% in the same period. The broader U.S. hepatitis B vaccine market is potentially worth $800 million by 2027, positioning Dynavax to capture upside growth.
In addition, Dynavax’s clinical pipeline includes the advancement of a shingles vaccine program (Z-1018), a Tdap vaccine program (Tdap-1018), and a plague vaccine program in collaboration with the U.S. Department of Defense. While the Shingles and Tdap programs are focused on safety, tolerability, and immunogenicity, the plague vaccine is in a Phase 2 clinical trial, with top-line data expected in the fourth quarter of 2024.
Dynavax’s Recent Financial Performance & Outlook
In the first quarter of 2024, the company reported its financial results. The revenue was $50.79 million, lower than the analysts’ expectations of $54.97 million, but higher than the $46.9 million revenue in the first quarter of 2023. The net product revenue of the HEPLISAV-B vaccine increased to $47.8 million from $43.5 million. The net loss decreased significantly from $24.3 million in Q1 2023 to $8.7 million in Q1 2024. The earnings per share were -$0.07, which fell short of the consensus projection of -$0.02.
The company also reported having cash, cash equivalents, and marketable securities amounting to $723.5 million.
Management reaffirmed its 2024 financial guidance, outlining key expectations for HEPLISAV-B to generate net product revenue between $265 million and $280 million. The gross margin for HEPLISAV-B is projected to be roughly 80%. Research and development expenses are expected to be $60 – $75 million, while selling, general, and administrative expenses are predicted to fall between $160 – $180 million. In terms of cash, cash equivalents, and marketable securities, the company anticipates these to be higher by the end of 2024 compared to the end of 2023.
What Is the Price Target for DVAX Stock?
Analysts following the company have been constructive about the stock. For instance, Goldman Sachs analyst Paul Choi recently reiterated a Hold rating on the shares while assigning a $20 price target. He noted that increasing its profit margins and advancing its early-stage pipeline will significantly drive the company’s long-term success.
Dynavax Technologies is rated a Moderate Buy overall, based on the recommendations and price targets recently issued by three analysts. The average price target for DVAX stock is $26.00, representing a potential upside of 135.93% from current levels.
The stock has been range-bound the past year and sits at the lower end of its 52-week price range of $10.48 – $15.15. It demonstrates negative price momentum, trading below its 20-day (11.55) and 50-day (11.71) moving averages. The shares trade at a premium to the industry, with a P/S ratio of 6.6x compared to the 2.12x average of the Specialty & Generic Drug Manufacturers industry.
Final Analysts on DVAX
Dynavax remains a noteworthy prospect for those eyeing long-term, high-reward investments in biopharmaceuticals. The company’s continued growth in the market share of its flagship product, the Heplisav-B vaccine, coupled with the promising potential of its vaccine pipeline, provides solid indicators of potential future success.
The firm’s solid financial footing, as evidenced by its plentiful cash reserves and promising revenue predictions for 2024, further underpin its potential for economic growth. Investors may want to keep an eye out for a positive turn in price momentum and progress in the primary drivers of Dynavax’s long-term value, including increasing profit margins and success in advancing its early-stage pipeline, before initiating a position.
