Dynavax's positive Phase III results with the hepatitis B virus vaccine Heplisav brings the firm a step closer to a complete response to FDA regarding its clinical hold on the product, but the firm left unclear a timeline regarding how soon testing might again get under way.

"Near future, I think, is the correct definition" of when the response to FDA will be complete, CEO Dino Dina said during an Aug. 6 conference call on the top-line results and the firm's second-quarter earnings.

FDA placed Merck & Co.-partnered Heplisav on clinical hold in March, after one subject who received the TLR-9-based drug came down with Wegener's granulomatosis, a rare inflammation of the blood vessels (¹ Also see "Merck’s Heplisav Gets FDA Clinical Hold" - Pink Sheet, 17 March, 2008.).

Serious adverse events in the study, called PHAST (Phase III HeplisAv Short-regimen Trial), were otherwise "very much in line with what was expected," Dina said.

The multicenter study evaluated 2,427 patients between 11 and 55 years of age in Canada and Germany. Top-line results show 95 percent of subjects dosed twice with Heplisav developed antibodies against HBV after 12 weeks. Of patients dosed three times with the standard HBV vaccine, Engerix-B from GlaxoSmithKline, 81 percent developed antibodies after 28 weeks.

Full data from the trial will be disclosed later.

Heplisav combines Dynavax's immunostimulatory sequence targeting TLR9 with HBV surface antigen, with the aim of enhancing speed of protection. Scientists are not certain how the mechanism of action might pertain to Wegener's.

Oppenheimer analyst Bret Holley wrote in an Aug. 6 research note that his firm continues to see "some likelihood" that the clinical hold eventually will be lifted.

The schedule for finishing the complete response remained the sticking point for investors, and left analysts to guess. Susquehanna analyst Derek Jellinek predicted the total development plan for Heplisav will be delayed by at least two quarters, and expects an update in two to four months.

In second-quarter earnings, Dynavax reported GAAP net loss per share of 15 cents on revenue of $9.9 million, beating Susquehanna's estimate of 25 cents on $7.7 million in revenues. The Berkeley, Calif.-based firm ended the quarter with $63.1 million, enough to fund various ongoing programs into 2010.

- Randall Osborne (r.osborne@elsevier.com)

Heplisav Phase III Data Good, But Timing Of Complete Response Still Unclear

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