Goldman Sachs Downgrades Dynavax Amid Shingles, Hepatitis B Uncertainty

Marcus LeeTuesday, Feb 11, 2025 3:31 pm ET
5min read


Goldman Sachs analyst Paul Choi has downgraded Dynavax Technologies Corporation (DVAX) to 'Sell' from 'Neutral' and cut the price target from $15 to $12, citing growing competition in the shingles vaccine market and uncertainty surrounding the FDA's regulatory stance on vaccines in the U.S. The downgrade reflects updated views and recent competitive dynamics for vaccines, particularly in the shingles vaccine market, where GlaxoSmithKline's (GSK) Shingrix has gained a significant market share. Shingrix's pre-filled syringes, which have been accepted for review by both the FDA and EMA, could further improve its convenience and appeal to patients and healthcare providers, potentially reducing the demand for Dynavax's Z-1018 program.

Dynavax is conducting a Phase 1/2 trial to evaluate the safety, tolerability, and immunogenicity of Z-1018 compared to GSK's Shingrix in 441 healthy adults aged 50 to 69. However, the growing competition and uncertainty about the FDA's regulatory stance on vaccines in the U.S. could impact the company's long-term revenue prospects. Choi's downgrade and reduced price target reflect this uncertainty, as analysts now forecast 2024 sales of $278.13 million and adjusted EPS of $0.12, down from previous estimates.

The uncertainty surrounding the FDA's regulatory stance on vaccines in the U.S. can also influence the outlook for Dynavax's Heplisav-B vaccine, particularly beyond its peak sales. In May 2024, the FDA issued a Complete Response Letter (CRL) stating that the application for a four-dose regimen of HEPLISAV-B did not provide sufficient data to fully evaluate its effectiveness or safety. This decision has no impact on the approved indication for HEPLISAV-B, but it does raise questions about the potential for future regulatory approvals and the vaccine's long-term revenue outlook.



Despite its market share gains, questions remain about the FDA and ACIP's regulatory stance on vaccines in the U.S., which could impact Heplisav-B's outlook beyond its peak sales. The uncertain demand for repeat hepatitis B vaccinations in the 2030s may also impact Heplisav-B's long-term prospects. Dynavax is expected to report fourth-quarter earnings on 20 February, with analysts estimating Q4 adjusted EPS of $0.04 and sales of $72.92 million.



In conclusion, the growing competition in the shingles vaccine market and the uncertainty surrounding the FDA's regulatory stance on vaccines in the U.S. have led Goldman Sachs to downgrade Dynavax Technologies Corporation to 'Sell' from 'Neutral.' These factors, along with the uncertain demand for repeat hepatitis B vaccinations in the 2030s, could impact the company's long-term revenue prospects and investor confidence. As Dynavax continues to develop and commercialize innovative vaccines, it will be crucial for the company to address these challenges and maintain a strong pipeline to drive growth and value for shareholders.