Progress for Dynavax Pipeline - Analyst Blog

Dynavax Technologies Corporation (DVAX) announced recently it has selected the molecule DV1179 for clinical development in its endosomal Toll-like Receptor (TLR) inhibitor collaboration with GlaxoSmithKline (GSK). Currently, IND (Investigational New Drug)-Enabling Studies are underway for DV1179, a bifunctional TLR inhibitor. The selected molecule is expected to be tested in humans later this year.

The two companies are collaborating on the development of novel inhibitors of endosomal TLRs for treating patients suffering from multiple autoimmune and inflammatory diseases. TLRs are key receptors of the innate immune system.

Under the agreement, Dynavax is conducting research mainly in the area of autoimmune and sterile inflammatory diseases. GlaxoSmithKline possesses the right to exercise its option to license each program on the achievement of proof-of-concept or earlier. After exercising its option, Glaxo will further develop and commercialize the products. Dynavax stands to receive tiered royalties on sales, and has the option to co-develop and co-promote one specified product.

In December 2008, Dynavax received an initial payment of $10 million on announcement of the agreement. Glaxo received an exclusive option over four programs focusing on autoimmune and inflammatory diseases such as lupus, psoriasis, and rheumatoid arthritis.

Canadian Approval for Heplisav Trials

Recently, Health Canada, the Canadian equivalent of the U.S. Food and Drug Administration (FDA), approved the commencement of late-stage studies for Dynavax’s hepatitis B vaccine (HBV) Heplisav.

Dynavax is evaluating Heplisav in two late-stage trials. One of them is a large-scale study, designed to enroll 2,000 patients in Canada and the United States. Out of the 2,000 patients, 1,600 will be treated with Heplisav, while the remaining patients will receive GlaxoSmithKline‘s HBV vaccine, Engerix-B. The large-scale study intends to show that Dynavax’s HBV vaccine is just as effective as Engerix-B eight weeks after the last active dose.

Dynavax is evaluating Heplisav in patients with chronic kidney disease in the other late-stage trial. These two studies are aimed at fulfilling licensing requirements in the U.S., Canada and Europe. Heplisav aims to provide increased and rapid protection, utilizing fewer doses than currently available vaccines. The company expects to report data from these studies in mid-2011.

Dynavax currently has a Zacks #3 Rank (Hold), implying that the stock is expected to perform in line with the broader U.S. equity market over the next one to three months. We are Neutral on the company in the long-term as well. The Neutral recommendation implies that the stock is expected to perform in line with the overall U.S. equity market over the next six to twelve months. Therefore, we advise investors to retain the stock over this time period.

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