JPMorgan Sees Entry Point In Dynavax Ahead Of June Oncology Conference

The American Society of Clinical Oncology's 2018 annual meeting is scheduled to be held in Chicago, Illinois June 1-5.

In a Thursday note, JPMorgan evaluated the prospects for Dynavax Technologies Corporation DVAX in the coming month, especially ahead of the ASCO presentations.

The Analyst

Analyst Anupam Rama upgraded Dynavax from Neutral to Overweight and increased the price target for the shares from $25 to $27.

The Thesis

Despite Dynavax' SD-101 showing encouraging early signals of efficacy in both melanoma and head and neck indications, the opportunity is grossly underappreciated at Dynavax's current valuation, Rama said in the note.

The launch inflection of Heplisav — the Berkley, California-based company's adult hepatitis B vaccine — is a 2019 event, the analyst said. The vaccine received the FDA's approval in November. 

"We view as a best-in-class Hepatitis B vaccine," Rama said. 

Previewing Dynavax' ASCO presentations, Rama said the company is likely to give a Phase 2 melanoma update, with an abstract, and data expected to be released May 16.

The reward-risk profile is attractive headed into the readout headed into the readout, Rama said, projecting 30-60-percent potential upside for shares as opposed to zero-to-10-percent downside at today's levels. 

Dynavax shares have lost about 20 percent since reaching year-to-date highs around the time of its presentations at the 2018 American Association for Cancer Research conference in mid-April.

" ... We believe the recent downside has created an interesting entry point ahead of ASCO, additional SD-101 readouts in 2018 and the Heplisav launch long-term." 

The Price Action

Dynavax shares were rallying 18.72 percent at the time of publication Thursday to $19.10. 

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