UPDATE: J.P. Morgan Initiates Coverage on Dynavax Technologies Corporation with Neutral Rating

In a report published Wednesday, J.P. Morgan & Co. initiated coverage on Dynavax Technologies Corporation

with a Neutral rating. J.P. Morgan noted, “We are initiating coverage of Dynavax (DVAX) with a Neutral rating. Dynavax is a clinical stage biotechnology company with a focus on infectious and inflammatory diseases. The company has a number of interesting early-stage candidates in the pipeline, but the key potential value driver is the lead asset HEPLISAV, which has been submitted to the FDA for the active immunization against all subtypes of hepatitis B virus infection in adults 18-70 years of age. The Biologics License Application (BLA) has been submitted and a PDUFA date of February 24, 2013 has been set. While physician feedback leads us to believe that HEPLISAV is differentiated on the efficacy/convenience side, a recent FDA AdComm highlighted concerns on the robustness of its safety database and its overall benefit/risk profile. If granted a broad indication, HEPLISAV could be a ~$720M WW opportunity at peak, in our view. However, given the regulatory risks associated with HEPLISAV, we don't see the risk-reward profile as attractive, and thus we believe a Neutral rating is warranted. Our NPV analysis yields a valuation of $3/share.” Dynavax Technologies Corporation closed on Monday at $2.85.