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Is Dynavax Stock Still Worth Buying After Its 60%-Plus Rally? Analyst Weighs In
Stock Analysis & Ideas

Is Dynavax Stock Still Worth Buying After Its 60%-Plus Rally? Analyst Weighs In

Many investors hope to win big on healthcare stocks as shares can skyrocket when there is good news. Case in point: Dynavax (DVAX) shares shot up ~63% on Monday, after the vaccine-maker announced three positive developments regarding its proprietary toll-like receptor 9 (TLR9) agonist adjuvant CpG 1018.

First off, the UK government decided to make good on an option to order an extra 40 million doses of Valneva’s Covid-19 vaccine VLA2001. The vaccine utilizes CpG 1018, and the deal could see Dynavax pocket up to $230 million in 2021 revenues, although it is contingenton the successful progress of VLA2001 and therefore not guaranteed yet. Phase I/II data for the vaccine is anticipated in April.

Next up, the company said it has inked a deal with the Coalition for Epidemic Preparedness Innovations (CEPI). The foundation will provide Dynavax with a $99 million forgivable loan for the manufacturing of CpG 1018, to be used in CEPI grantees’ Covid-19 vaccines.

Also on the Covid-19 front, Dynavax and Clover Biopharmaceuticals disclosed that a Phase 2/3 clinical study evaluating Clover’s S-Trimer COVID-19 vaccine candidate with Dynavax’s CpG 1018 adjuvant, should begin in 1H21.

So, it is no wonder investors were pleased, and so is Cowen’s Phil Nadeau. The 5-star analyst believes the news, “both increases the likelihood that CpG 1018 will be in a commercial COVID vaccine, and highlights its long term potential to create value for DVAX shareholders via partnerships for the discovery and development of novel vaccines.”

Nadeau is “particularly optimistic” about Clover’s decision to use CpG 1018 in its Phase II/III trial, and says it further confirms its potential to “improve the profile of COVID vaccines.”

The potential cash windfall in a low-risk setting adds to the overall positivity.

“With CEPI’s forgivable loan to be used for the production of CpG 1018 to support CEPI’s grantees including Clover, DVAX and its shareholders will benefit should Clover’s vaccine be successfully developed and commercialized, but bear limited risk should it not be,” the analyst said.

All in all, Nadeau reiterated an Outperform (i.e. Buy) rating on DVAX shares and sticks to a $20 price target. This figure suggests upside of a handsome 112%. (To watch Nadeau’s track record, click here)

2 other analysts recently posted DVAX reviews and both back Nadeau’s call with additional Buys. DVAX’s Strong Buy consensus rating has a $17.50 average price target attached, which could yield returns of 86%, should the figure be met over the next 12 months. (See DVAX stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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