Dynavax Technologies Corporation DVAX announced that its France-based collaborator, Valneva SE achieved positive initial results in a phase I/II study evaluating the latter’s COVID-19 vaccine candidate, VLA2001. Based on the initial data from the study, Valneva is planning to start a phase III study on the candidate by the end of this month. Please note that initiation of the late-stage study is subject to regulatory approval.

VLA2001 is an inactivated COVID-19 vaccine candidate, which uses Dynavax's CpG 1018 adjuvant. The adjuvant is also used in Dynavax’s marketed vaccine for the prevention of hepatitis B, Heplisav-B, in the United States.

The phase I/II study evaluated two-dosing regimens each of three doses (low, medium, high) of VLA2001 three weeks apart. Data from the study showed that more than 90% of participants developed significant levels of antibodies to the SARS-CoV-2 virus spike protein across all three dose groups. Seroconversion rates were 89.8% in the medium dose and 100% in the high dose group. Moreover, the candidate achieved geometric mean of neutralizing antibody titres at or above levels compared to a panel of convalescent sera, after two weeks of following administration of the second dose in higher dose group.

Shares of Dynavax were up 2.9% on Tuesday following the news. In fact, the company’s stock has increased 127.4% so far this year against the industry’s decline of 5.4%.

Meanwhile, the company also has collaboration agreements with different partners, including Coalition for Epidemic Preparedness Innovations, for the development of a COVID-19 vaccine using its CpG 1018 adjuvant. Several study data readouts from these collaboration partners are expected throughout the year, which may drive share prices if promising.

Moreover, Dynavax expects that its CpG 1018 adjuvant could be utilized in up to 500 million to 1.5 billion doses of its collaborators’ vaccines annually starting in 2022. These will likely boost revenues significantly.

Apart from COVID-19 vaccines and Heplisav-B, the CpG 1018 adjuvant is also being used with other vaccine candidates targeting multiple indications, including pertussis, and universal flu.

Meanwhile, Heplisav-B is expected to be launched in Europe during the fourth quarter of 2021. The hepatitis vaccine has generated $36 million in sales in 2020, gaining 4% year over year. The launch in Europe will likely bring additional revenues. However, we note that the product faces stiff competition from three other approved vaccines — Glaxo’s GSK Engerix-B and Twinrix, Merck’s MRK Recombivax-HB. Moreover, VBI Vaccines VBIV is also developing a hepatitis B vaccine in late-stage studies in the United States, Europe and Canada.

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Zacks Rank

Dynavax currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

(We are reissuing this article to correct a mistake. The original article, issued on April 7, 2021, should no longer be relied upon.)

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