The pharmaceutical company Dynavax Technologies was recently hit by a securities class action suit alleging the company made false or misleading statements about one of the drugs it was testing. To learn more this case, visit Battea’s Dynavax case summary.
Specifically, the suit alleges Dynavax failed to disclose that the third phase of its trial for the Hepatitis B vaccine HBV-23 did not meet standards outlined in a 2013 Complete Response Letter issued to the company by the U.S. Food and Drug Administration. Further, the complaint says Dynavax did not provide the FDA with enough information about the drug in a revised license application, and that the company does not have the resources on hand to properly address the issues. Consequently, all statements the company made about the HBV-23 vaccine (which Dynavax calls HEPLISAV-B) and the company’s business, operations, and prospects were allegedly false and misleading.
The suit was filed in the U.S. District Court for the Northern District of California and has a class period from March 10, 2014, to Nov. 11, 2016.
Dynavax received another CRL from the FDA in November 2016, following a review of the company’s application for approval of HBV-23, according to a report from the company. Specifically, the FDA wanted more information about adverse effects patients receiving the drug were having, potentially including cardiac events, among other issues. However, this CRL was issued despite the fact that the FDA had yet to review additional information about the drug it received from Dynavax in October.
Internally Dynavax said it felt strongly that it was on the right track for approval, but that financial issues likely would not allow it to push the drug through to where the FDA wants it, the report said. As such, it is now seeking outside help to move the testing forward.
“The CRL is consistent with our opinion that HEPLISAV-B is approvable and we are seeking to meet with the FDA as soon as possible,” said Eddie Gray, chief executive officer of Dynavax. “However, the time and resources that will be required to gain approval leads us to consider that we may not be able to advance this program on our own and we are moving swiftly to identify a potential pharmaceutical or financial partner.”
How did stock prices move?
The Friday before the latest CRL was announced – on Monday, Nov. 14 – Dynavax had a price per share of $11.60. But once the announcement was made, that number plummeted to $4.10 per share. After that, apart from occasional upticks in early December that sent its price per share above $5, Dynavax stock hasn’t really recovered much. It is currently trading at $4.08 per share. The company’s highest stock price in the past year was set in early January, 2016, when it reached $29.70.