DVAX stock is taking a major hit this morning as Dynavax (NASDAQ:DVAX) issued a restructuring plan to focus on its vaccine business.
When it comes to the world of pharmaceuticals, companies often prefer to focus on the drugs that are ready to go into the market rather than those and that is exactly what Dynavax Technologies Corporation have planned to do. However, that is part of the company’s restructuring efforts that they announced a few days back.
Concentrate More On Heplisav-B
Dynavax announced that the restructuring process will involve trying to find out alternative ways in which it can divest from its portfolio of immuno-oncology drugs and more importantly, it has vowed to concentrate more on HEPLISAV-B.
HEPLISAV-B is one of the drugs that is primed for commercial use and the company has decided to devote more resources towards making that drug a success. In addition to that, it has also been announced that the company will streamline its operations and also trim its workforce as part of the restructuring drive.
The Chief Executive Officer of the company Eddie Gray said, “We plan to curtail further investment in our immuno-oncology portfolio and will seek strategic alternatives for these programs. As a result, the board and management have made the difficult decision to reduce our workforce.”
At the time of writing, DVAX stock is down by over 16% and now trading at $5.33. The stock made a new 52-week low of $5.25 earlier in the session.
Dynavax Job Cuts
According to the press release, the company’s decision to concentrate more on its vaccine business will lead to job losses and it is being expected that as many as 82 employees might be culled. However, the restructuring costs, in addition to the cost of letting employees go will weigh heavily on the company and according to estimates, the cost of benefits and compensation alone will set Dynavax back by $16 million a year.
The restructuring period will see the company going through a churn of a sort but at the end of the day, the point of restructuring is long term prosperity. It is believed that in the long term, the company will also be focussing on its 1018 adjuvant.
After today’s slump, DVAX stock is down 45% in 2019 alone. Moreover, the stock has corrected 70% from its 52-week high of $17.05.
Featured Image: Depositphotos © Sashkin7