Dynavax Sinks 32% As FDA Cancels Its AdComm Meeting

On Friday, shares of Dynavax Technologies (DVAX) tumbled by 32% after the FDA announced that it had cancelled the advisory committee meeting scheduled for November. The ad comm was supposed to review Dynavax's drug for Hepatitis B, known as Hepislav, in November for the FDA. The decision on whether or not to approve the drug would have come one month later in December. 

What really feels odd is that neither the company nor the FDA gave an adequate reason to why the ad comm meeting was cancelled. The only thing that the FDA has cited is that  it needs more time to "review and resolve several outstanding issues." But unfortunately no indication is given of what issues need to be fixed. 

DVAX's Hepatitis-B drug has already had a rough path with the FDA. Back in February of 2013 the FDA gave the drug a Complete Response Letter -- CRL -- citing that there were several safety issues associated with the older age population. More specifically, there were a lot of autoimmune events in patients that were given the drug. 

With the prior CRL, and now this cancelled ad comm meeting, it doesn't bode well for the future of Dynavax. As much as I would like to recommend the stock to investors, I would say it would be wise to steer clear of this one. Hepislav-B had safety issues in the past, and now this cancelled ad comm meeting doesn't bode well either. Plus the FDA's response is too vague.

All the FDA said is that it will continue to evaluate the drug, and issue a meeting if necessary. That doesn't sound like the FDA is confident to approve the drug in its current form. Having said that, the stock should continue to fall until there is more clarity from the FDA. The speed at which the FDA works is not quick, therefore a lot of investors will be left hanging for months without knowing the real reason the meeting was cancelled. It is best to stay away from buying shares in Dynavax for the time being.