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Taking A Shot At Dynavax

Taking A Shot At Dynavax
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* Phase 3 results of adult hepatitis B prophylactic vaccine in July

Drug companies take years - even decades, and burn a tremendous amount of cash to bring a drug to the market. The process of drug development is challenging as the product candidate may fail in the clinical stage itself or may fail to pass the FDA muster after successfully completing all the stages of trials. Only some companies, in spite of various setbacks, exude a steely determination and press on without quitting.

The company we are profiling today is Dynavax Technologies Corp. (DVAX: Quote), which despite experiencing setbacks in clinical trials of its lead vaccine candidate, has moved forward with its development.

This clinical-stage biopharmaceutical company is focused on developing novel products to prevent and treat infectious and inflammatory diseases. The company's lead product candidate is Heplisav, a late-stage investigational adult hepatitis B prophylactic vaccine designed to provide rapid and superior protection with fewer doses than current licensed vaccines.

Hepatitis B is a chronic disease which attacks the liver that can lead to cirrhosis of the liver or liver cancer. An estimated 2 billion people worldwide have been infected with HBV. In the U.S., 12 million people have been infected with this disease while the number of chronic infections total about 1.25 million.

Some of the FDA-approved drugs to treat hepatitis B, include, Schering-Plough's Intron A, Roche's Pegasys, GlaxoSmithKline's Lamivudine, Gilead Sciences' Hepsera and Bristol-Myers Squibb's Baraclude, to name a few.

However, there is no cure for chronic hepatitis B as yet. Therefore, prevention through effective HBV vaccines is very important. GlaxoSmithKline's Engerix-B and Merck's Recombivax-HB are the primary players in the hepatitis B prophylactic vaccines market.

Heplisav is being evaluated in two phase III studies - one for adults 40 years and older and the other for patients with end-stage renal disease (chronic kidney disease patients).

Heplisav, which was being jointly developed by Dynavax and Merck & Co., Inc. (MRK), was put on clinical hold in March 2008 after a single case of Wegener's granulomatosis was reported in a phase III study conducted outside the U.S. Wegener's granulomatosis is a rare disease in which the blood vessels are inflamed.

In October 2008, the regulatory agency requested additional information prior to considering further development of Heplisav in end-stage renal disease patients but advised that the balance of risk versus potential benefit no longer favored continued clinical evaluation of Heplisav in adults and children.

In the wake of regulatory issues, Merck, which had licensed exclusive worldwide rights to Heplisav from Dynavax, terminated its partnership on December 19, 2008, and handed over all the rights back to Dynavax. The licensing deal was worth $31.5 million up front and up to $105 million in milestone payments.

With Dynavax responding to the issues raised by the FDA related to its investigational hepatitis B vaccine, the clinical hold for the Heplisav Investigational New Drug application in individuals with chronic kidney disease was removed by the regulatory agency on September 10, 2009. Accordingly, Dynavax initiated a phase III registration trial for Heplisav hepatitis B vaccine in individuals with chronic kidney disease towards the end of that month.

The primary endpoint of the study is non-inferiority of three injections of Heplisav at times 0, 1 and 6 months versus eight injections of GlaxoSmithKline's Engerix-B, consisting of double doses at times 0, 1, 2 and 6 months. The company completed enrollment for the late-stage study of Heplisav in subjects with chronic kidney disease in January of this year. The last immunizations in this study are expected to be administered this month. (June).

A second registration trial, a phase III lot-to-lot consistency trial, was initiated in February 2010. The trial was designed to enroll 2,000 patients in Canada and 1,600 patients in the U.S. The patients were randomized to receive either Heplisav or Engerix-B. One of the primary objectives of this trial is to prove non-inferiority of the immune response to Heplisav vaccination compared to Engerix-B vaccination.

The 12-month follow-up of the phase III study evaluating immunogenicity in comparison to Engerix, lot-to-lot consistency and safety was completed in May of this year. The results of this study are expected to be reported next month (July).

Dynavax estimates that the current worldwide market for adult monovalent hepatitis B vaccines exceeds $400 million annually. In addition, over an estimated $400 million in sales are generated by GlaxoSmithKline's hepatitis A/B combination vaccine Twinrix. Market research firm Global Data expects the global hepatitis B vaccine market to grow up to $1.27 billion by 2017 from an estimated $689 million in 2009.

Key market segments of the hepatitis B vaccine, include, chronic kidney disease patients, healthcare workers and first responders, travelers, people with multiple sexual partners or injection drug use, and chronic liver disease patients, according to Dynavax.

And now for the other drug candidates in the company's pipeline...

- Universal flu vaccine, which is under phase I testing, being developed in collaboration with Novartis Vaccines and Diagnostics, a division of Novartis AG (NVS)
- DV-601, hepatitis B therapeutic vaccine, under phase I testing
- SD-101, hepatitis C therapy, which is also under phase I development stage
- DV1179, which entered the phase I trial of lupus program as recently as April of this year. Dynavax has a worldwide strategic alliance with GlaxoSmithKline for the development of DV1179. Data from this study is expected later this year.
- AZD1419, a preclinical program partnered with AstraZeneca, for asthma.

A quick peek at Dynavax' balance sheet...

With no drugs yet in the market, the company's revenue comes from collaboration agreements, services and license fees. Significant losses have been incurred each year since inception.

As of March 31, 2011, the company had an accumulated deficit of $335.4 million, cash, cash equivalents and marketable securities of $53.2 million, restricted cash of $0.7 million and working capital of $44.4 million.

DVAX has thus far hit a 52-week low of $1.58 and a 52-week high of $3.59. The stock closed Wednesday's trading at $2.51.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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