Lack of Panel Could Be Positive for Dynavax (DVAX) - RBC
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RBC Capital analyst Simos Simeonidis weighed in on Dynavax Technologies (NASDAQ: DVAX), saying while things are pretty murky, the lack of a need for a panel could actually be a positive for DVAX.
Simeonidis commented, "DVAX shares were down 30% on Friday on FDA’s update that the November 15th panel, announced just four weeks earlier, was cancelled “to allow time for the FDA to review and resolve several outstanding issues”. Investors interpreted this to mean “there’s no need for a panel, because we have a lot of outstanding issues to discuss before we can even decide whether this BLA needs a panel”. However, and even though this initial interpretation may ultimately end up being the correct one, another way, and perhaps the more appropriate way to interpret this is, is “there’s no need for a panel, because the types of questions we have can be answered just via communication with the company, without needing to hold a panel”. Dynavax put out its own press release over the weekend and we spoke with management. Given 1) the different tenor of the FDA announcement and the company’s press release and 2) the opaqueness of the process of communicating with FDA, it is very difficult to be certain about the reasons behind this change in course by FDA. However, we have always viewed the lack of a need for convening panel as an indication that the outstanding questions would fall in the “fairly straight forward to answer” category, which should be a positive for DVAX, given the vaccine’s clear efficacy. Similarly, we have felt that convening a panel would be a risk for DVAX shares, because this would be the forum where safety data would be very closely scrutinized, and the potential for a negative vote could come from further dissection (and perhaps recounting) of the Dynavax-reported safety numbers."
The firm maintained a Sector Perform rating and price target of $16 on DVAX.
Shares of Dynavax Technologies closed at $10.91 yesterday.
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