The first rule of running a biotech company: Don't run low on cash.
Once investors smell a cash squeeze coming, they'll hammer shares
mercilessly.
That was the painful lesson learned by the executives at Dynavax Technologies (Nasdaq: DVAX).
Though DVAX was pursuing the development of a very promising new
vaccine, the company was burning through more than $15 million in cash
every quarter and was at risk of not making it to the FDA finish line.
Shares, which traded around $5 in October 2012, skidded all the way to
$1.
The good news is that the company shored up its balance sheet late
last month, and shares have finally begun to rebound. And, with a few
breaks, DVAX looks poised to rise from a recent $1.45 to $3, $4 or even
$5.
Little Company, Big Target Market
DVAX has spent years developing Heplisav, which is a vaccine for
hepatitis B, a disease that currently afflicts 240 million people around
the world, according to the World Health Organization. (more)
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