Clinical-stage biopharmaceutical company Dynavax Technologies Corporation (DVAX) jumped almost 6.5 percent in early trading on Friday after the company announced the pricing for its planned stock offering. The embattled Dynavax is facing an uncertain future that hinges on approval of its hepatitis-B vaccine, hepislav, and has shed almost 75 percent of its value since the start of October 2012.
Company to Raise $130 Million
Dynavax had previously announced its offering of some 79.57 million new shares as part of a capital raise. Now, the company has announced that the shares will be priced at $1.075 apiece, making the gross proceeds from the sale an expected $85.5 million. The company will also be offering of 43,430 shares of its Series B Convertible Preferred Stock at $1,075 a share to raise another $46.7 million. The Series B shares are non-voting and convertible to 1,000 shares of common stock provided conversion doesn’t result in the owner holding more than 9.98 percent of total shares.
Hepislav Effective, But is it Safe?
Shares in Dynavax plunged in June after the FDA called for an additional safety trial for hepislav. This was an expensive development for Dynamax, which needed to run more trial prior to receiving approval. The decision to offer new shares is directly connected to this need for more cash to fund these trials. Hepislav, though, has already demonstrated itself to be effective. Data from two of its late-stage clinical trials was published in the journal Vaccine in late September with positive results, including the conclusion that hepislav “"induced significantly higher seroprotection rates in all groups than the licensed comparator hepatitis-B vaccine in a shorter two-dose schedule over one month while maintaining a similar safety profile."
New FDA Trial Announced
Dynavax has already announced the design of its next clinical study to satisfy the FDA’s safety concerns, stating after market close on October 16: "[T]he planned study, HBV-23, is intended to provide a sufficiently sized safety database for the Agency to complete its review of Dynavax's Biologics License Application (BLA). It will be an 8,000 subject, Phase 3, observer-blinded, randomized, active-controlled, multicenter trial of the safety and immunogenicity of HEPLISAV compared with Engerix-B in adults 18 to 70 years of age."
With a fresh injection of cash, Dynavax is clearly hoping to ride out hepislav current approval drama, but it’s clear that the company would be in serious trouble if the drug doesn’t get the approval it needs in the end. CEO Eddie Gray, though, appears to remain confident. Following the initial announcement of the FDA’s call for the new trial in June, he said “…there was a strong endorsement for HEPLISAV's immunogenicity data demonstrated in previous clinical trials. In that context, the spirits and the tone of the interactions with the FDA suggest to us of their support for HEPLISAV's path forward to approval. …we are aligned with the FDA and understand the rationale for their recommendations. We remain optimistic that obtaining the additional safety data will facilitate FDA's review for an indication in adults 18 to 70 years old.”