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Loss at Dynavax Wider than Expected

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Dynavax Technologies Corporation (DVAX - Free Report) posted a loss of 11 cents per share, wider than the Zacks Consensus Estimate of a loss of 8 cents per share and the year-ago loss of 3 cents per share.

Dynavax reported revenues of $1.8 million, down 84.2% from a year ago and much lower than the Zacks Consensus Estimate of $6 million. The huge decline was attributable to a 90% reduction in collaboration revenues to $1 million.

Collaboration revenues in the year-ago quarter were higher due to the recognition of certain milestones achieved as per Dynavax's partnership with GlaxoSmithKline (GSK - Free Report) to develop and commercialize toll-like receptor (TLR) inhibitors.

Research and development expenses increased 7.7% year over year to $12.5 million.

General and administrative expenses jumped 104.4% year over year to $9.3 million due to higher stock-based compensation expenses, an increase in administrative headcount and market research costs related to hepatitis B vaccine, Heplisav.

Dynavax is developing Heplisav, in collaboration with GlaxoSmithKline.

We note that Heplisav is under review in Europe. In Feb 2013, the company received a setback in its efforts to get the candidate approved in the US.

The US Food and Drug Administration (FDA) issued a Complete Response Letter (CRL) to the company refusing to approve Heplisav in adults in age bracket 18-70 without further evaluation of safety. The company intends to meet the FDA shortly to discuss the steps necessary to get the candidate approved.

Apart from lead candidate Heplisav, Dynavax is also developing another candidate. We remind investors that Dynavax is developing AZD1419, a proprietary second generation TLR-9 for the treatment of asthma, in partnership with AstraZeneca (AZN - Free Report) . 

Total revenues in 2012 were $9.7 million, down 55.0% year over year and significantly below the Zacks Consensus Estimate of $14 million. Loss per share of 41 cents was wider than the loss of 39 cents posted in 2011 and the Zacks Consensus Estimate of 37 cents.

Dynavax carries a Zacks Rank #3 (Hold). Right now, Array Biopharma (ARRY - Free Report) looks well placed in the pharma sector with a Zacks Rank #2 (Buy).

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