We recently compiled a list of the 12 Best Small Cap Pharma Stocks to Buy Now. In this article, we are going to take a look at where Dynavax Technologies Corporation (NASDAQ:DVAX) stands against the other small cap pharma stocks.
Impact of US Tariffs and Obesity Drug Performance on the Pharmaceutical Industry
Emily Field, Head of European Pharma Research at Barclays, spoke on CNBC on February 20 about the performance of obesity medications, the effects of US tariffs, and the dynamics of the pharmaceutical industry. According to her, the industry might not perform poorly at least in the first half of this year. The effectiveness of obesity medications is still up for debate, though, as leading companies in the field have shown inconsistent results.
Speaking about the tariffs, she stated that since some businesses assemble their products in the US after producing them overseas, their implementation raises several unanswered questions for the pharmaceutical industry. These businesses therefore have relatively low manufacturing costs, which is an important factor to take into account when assessing the effects of tariffs. She thought that these businesses could easily absorb the higher expense of the tariffs. The topic hasn’t come up much on earnings calls this quarter, and the market is nearing the end of the reporting season.
Eli Lilly’s Chief Scientific Officer spoke with CNBC’s Health and Pharma correspondent Angelica Peebles about the weight reduction industry. The domain presents opportunities for easier-to-use treatments, including tablets, and medications that help individuals lose weight, she noted based on the conversation. How much weight reduction users need to observe on top of what they already have is another topic of discussion about the subject. According to Dan Skovronsky, Chief Scientific Officer of Eli Lilly, the majority of the audience seems to benefit from medications that provide about 20% weight loss. According to him, the market for stronger medications that offer at least 25% is smaller.
He also believed that the potential benefits of these weight reduction medications for a wide range of illnesses were the most fascinating thing he had witnessed in his work as a scientist and doctor. The patterns they have been observing in the answers from patients serve as their current source of knowledge.
Our Methodology
For our methodology, we selected stocks with a market capitalization between $250 million and $2 billion and ranked them based on the highest hedge fund sentiment according to Insider Monkey’s database, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A biopharmaceutical company executive signing a collaboration agreement with a partner.
Dynavax Technologies Corporation (NASDAQ:DVAX)
Number of Hedge Fund Holders: 31
Dynavax Technologies Corporation (NASDAQ:DVAX) is a biopharmaceutical company focused on developing vaccines to protect against infectious diseases. Its flagship product, Heplisav-B, is a hepatitis B vaccine for adults that offers full protection with a two-dose regimen, unlike traditional three-dose vaccines. The company uses its proprietary CpG 1018 adjuvant technology to enhance immune responses, and it generates revenue from sales of Heplisav-B and the adjuvant, which is also used in several COVID-19 vaccines. The company sells its products primarily in the U.S. and Europe.
Dynavax Technologies Corporation (NASDAQ:DVAX) reported strong Q4 2023 results, with total revenues of $72.0 million, a 30% increase from Q4 2022. The company’s flagship product, Heplisav-B, saw net product revenue of $71 million, up 39% year-over-year. It also reported a GAAP net income of $7.1 million ($0.06 per share basic) and adjusted EBITDA of $13.4 million, marking a 225% increase from the previous year.
Looking ahead, Dynavax Technologies Corporation (NASDAQ:DVAX) expects Heplisav-B revenue to reach $305 to $325 million in 2025, with plans to capture at least 60% of the market by 2030. The company is diversifying its portfolio, securing a $30 million contract with the U.S. Department of Defense for its plague vaccine program and completing enrollment for a Phase 1/2 shingles trial. These developments highlight the company’s promising pipeline and strong position in the vaccine market, which makes it an attractive investment opportunity.
Overall DVAX ranks 3rd on our list of the best small cap pharma stocks to buy now. While we acknowledge the potential of DVAX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DVAX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.