Dynavax: in line for major revenue stream from potential Covid-19 vaccine approval

There is a potential new addition to the range of successful Covid-19 vaccines. In fact, Cowen’s Phil Nadeau thinks Clover and Dynavax’ (TWO) joint effort SCB-2019 seems “better tolerated than approved COVID vaccines.”

Nadeau’s lavish outlook follows Clover’s announcement last Wednesday. The company announced that its Covid-19 vaccine SCB-2019 – which uses Dynavax’s adjuvant technology – showed excellent results in a phase 3 trial.

The vaccine provided 100% protection against severe illness/hospitalization, 84% against moderate to severe disease and a 79% protection rate against the Delta variant. Overall, the vaccine showed a 67% efficacy rate against all COVID infections of any severity.

While the overall percentage may seem low, Moderna and Pfizer’s already approved vaccines went through the testing process before the current variants of concern became widespread, which is why Nadeau believes the results are “all the more meaningful in the context of 100% prevalence of COVID.” -19 variants in the study population.”

“We believe this data is strong enough to support approvals in global markets and enable Clover to capture market share,” the 5-star analyst continued.

Not to mention that Dynavax is reaping a meaningful revenue stream from the commercialization of SCB-2019. In June, Clover said it had reached an advanced purchase agreement with Gavi, the Vaccine Alliance. Through 2022, Clover will deliver 414 million doses of SCB-2019 to the COVAX facility – the initiative to expand global access to vaccines. In addition, the company estimates it is capable of producing more than 1 billion doses per year. Given Clover’s “potential scale and projected economics of DVAX (10-25%)”, the revenue windfall from the SCB-2019 commercialization could be a major problem for Dynavax.

In the fourth quarter, Clover plans to apply for conditional approval from several global regulators, including China NMPA, EMA and WHO, with a commercial launch possible before the end of 2021, pending conditional approval.

Based on the above, Nadeau will stick with the bulls and reiterate an Outperform (i.e. Buy) rating along with a price target of $20. (To see Nadeau’s track record, click here)

Three other analysts have recently thrown the hat on DVAX reviews, and they’re all of the same opinion – Buy. The stock’s Strong Buy consensus rating is supported by an average price target of $20.67, suggesting there is room for a 7% gain in the coming months. (See Dynavax stock analysis on TipRanks)

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