Why Dynavax Shares Surged

Why Dynavax Shares Surged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biopharmaceutical company Dynavax Technologies climbed 10% today after the company's quarterly results topped Wall Street expectations.

So what: The stock has been crushed recently on ongoing delays surrounding its hepatitis-B vaccine, Heplisav, but today's second-quarter beat -- EPS loss of $0.09 on revenue of $3.4 million versus the consensus loss of $0.10 and $2.91 -- is fueling a bit of optimism over a near-term turnaround. Of course, given the still-very low visibility on the time and costs associated with the Heplisav issues, Fools shouldn't get too excited over the quarter.

Expect Dynavax shares to remain pressured in the short term. As Foolish biotech expert Sean Williams wrote last month:

I suspect it could be another 18 months before Heplisav again sees the light of day. By then, Dynavax will have burned through what I suspect will be all of its remaining cash, forcing it to turn to a potentially dilutive secondary offering.

When you add the fact that Dynavax doesn't have any other approved products to lean on, those risks just don't seem worth taking on.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

The article Why Dynavax Shares Surged originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Originally published