What happened
They say that good things come in three. This seems to be the case for Dynavax Technologies (NASDAQ: DVAX) today. Biotechnology stocks soared 47.1% as of 12:36 pm EST on Monday, after the company announced three developments.
First, Dynavax and Clover Biopharmaceuticals announced plans to launch a phase 2/3 clinical study in the first half of this year evaluating Clover’s candidate S-Trimer COVID-19 vaccine with Dynavax CpG 1018 adjuvant. Second, Dynavax and Coalition for Epidemic Preparedness Innovations (CEPI) announced a $ 99 million agreement for Dynavax to supply CpG 1018 manufacture for the global response COVID-19. Third, the company announced that the UK government is ordering an additional 40 million doses of Valnevaof the COVID-19 VLA2001 vaccine, which uses Dynavax CpG 1018 adjuvant.
Image source: Getty Images.
And
All three announcements are good news for Dynavax. And they all served as solid catalysts for the biotech stock.
Dynavax has committed to providing sufficient CpG 1018 adjuvant for 100 million doses of VLA2001 in total. This will generate revenue of up to $ 230 million for the company this year. And Valneva has the option to purchase additional amounts of Dynavax adjuvant to support another 90 million doses of VLA2001. The UK government order announced today makes it more likely that Valneva will need to obtain more adjuvant from Dynavax.
Turning to the CEPI agreement, the nonprofit will fund up to $ 99 million for Dynavax to manufacture CpG 1018. But that amount will technically be a loan. As Dynavax sells its adjuvant, it will reimburse CEPI for the financed manufacturing cost. But if the vaccine programs covered by the deal fail, the loan will be forgiven. Clover’s S-Trimer is one of the CEPI-funded COVID vaccine programs.
What now
Dynavax is expected to have many other potential catalysts throughout this year. One thing to note, especially related to today’s announcements, is Valneva’s announcement of the initial results of its VLA2001 phase 1/2 studies, expected in April.