Dynavax Technologies Corporation (NASDAQ:DVAX) Is A Big Winner: Here's What's Next

One company that we have come back to on a number of occasions here at Insider Financial is Dynavax Technologies Corporation (NASDAQ:DVAX). It is a biotechnology stock that is working on the bringing of a hepatitis B vaccine called Heplisav B to market in the US and it is one that has fallen foul of considerable negative market sentiment over the last 24 months or so. As part of our previous coverage, and specifically within this piece, we took a look at the science that underpins the drug in question and the data that Dynavax has put forward as being supportive of a regulatory approval, and used the information to form a bias as to the outcome of the program. As we mentioned last time, our expectations flew against those of wider markets – we suggested that the drug had a good chance of picking up a regulatory green light and that each time this program got a knock back (and in turn, each time Dynavax took a hit to its market capitalization), the dip might be a nice opportunity to pick up some discounted shares ahead of what we expected would ultimately be a positive regulatory outcome.It's taken a while, but we've finally had our thesis validated.News just hit press detailing the outcome of an advisory committee meeting set up by the FDA to assess the drug's registration application (and specifically to look at some safety data that's played a key role in sentiment and expectations surrounding this asset as it's moved along its development pathway) and things look good.The panel voted twelve to one in favor of recommending approval based on the safety data of presented by the company and – on the back of the strong outcome – Dynavax is running considerably into the start of this week.At market close on July 27 (last Friday) the company went for $9.25 a piece. The news hit press subsequent to this close, meaning its impact has come during after hours trading. This hasn’t muted the repose, however – Dynavax will open the session on Monday at $18.50 a share. That's a 100% run after hours, meaning we'll almost certainly see some follow through into the start of play on Monday as standard participation gets under way and markets start to load up in anticipation of a positive ultimate outcome at PDUFA.So what's next?This one is now all about the just mentioned PDUFA date. The company has had a long and winding path to this point and this meeting was widely seen as the final (and in the opinion of many, an insurmountable) hurdle before heading into a final decision from the FDA. With the meeting now out of the way and particularly with it having completed favorably (and heavily so, at that), Dynavax is going to start drawing considerable speculative volume in anticipation of a regulatory green light next month. The date to watch is August 10 and if the agency gives the drug a thumbs up Dynavax is going to run again, likely to a similar, if not higher, degree than we've just seen. Analysts put this drug at peak sales of between $500 million and $1 billion. Before the most recent run, Dynavax held a market capitalization of just $500 million, right at the low end of these sales estimates.The risk here is that the FDA will turn down the vaccine come August 10. Sure, the panel has recommended approval based on the latest safety data but the agency doesn’t have to follow its committee and there have been numerous occasions in the past where it hasn’t. With that said, when the vote is so strongly weighted towards one way of another (in this case, 93% of votes were positive), it would be highly unusual for the FDA to say no.Bottom line: a contrarian play in this one has proven a real winner to date but there's plenty more upside on offer for anyone late to the party.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on DVAX, sign up below!Image courtesy of Jeremy T Hetzel via FlickrDisclosure: We have no position in DVAX and have not been compensated for this article.