FDA has lifted the clinical hold on development of Dynavax's Hepatitis B vaccine Heplisav , allowing the firm to proceed with Phase III development - but in a smaller market than originally proposed: patients with chronic kidney disease.

The agency halted the program last year when one patient in a Phase III study was diagnosed preliminarily with Wegener's granulomatosis, a rare inflammation of the blood vessels (Also see "Merck’s Heplisav Gets FDA Clinical Hold" - Pink Sheet, 17 March, 2008.).

Moving to the more targeted population was likely the only path forward for the company, given how difficult it would be to assess for the rare event in the clinical trial setting. And an FDA already cautious about approving adjuvanted vaccines - Heplisav contains a Toll-like Receptor 9 agonist adjuvant - would not likely clear one for the general Hepatitis B vaccine market that carried a potential safety signal.

FDA is particularly concerned about autoimmune effects caused by adjuvants - and the Wegener's case played right into that.

"The fact that this fit FDA's view that adjuvants may cause autoimmunity caused them to put us on clinical hold first and ask questions later," Dynavax CEO Dino Dina explained in an interview.

Sept. 9-10 Were Big Days For The Vaccine Industry

FDA has been reluctant to approve vaccines with novel adjuvants, but the decision to lift this clinical hold combined with a positive endorsement Sept. 9 by the Vaccines and Related Biological Products Advisory Committee for GlaxoSmithKline's human papillomavirus vaccine candidate Cervarix could show the agency edging toward more acceptance (Also see "GSK Cervarix Clears Landmark FDA Vaccine Committee with Okay for Novel Adjuvant" - Pink Sheet, 9 September, 2009.). Cervarix uses a novel TLR4 adjuvant, and its approval has been delayed for years.

Additionally, the need to have an H1N1 vaccine ready, in adequate supply and potent enough to vaccinate the public in the fall also could expedite the agency's decision to approve the novel adjuvanted vaccines (Also see "Adjuvanted H1N1 Vaccine Excites FDA Panel, But Jury Is Still Out" - Pink Sheet, 23 July, 2009.).

Dynavax gained access to the TLR9 adjuvant through a non-exclusive licensing deal with Coley Pharmaceutical Group in 2007 (Also see "Dynavax Licenses Coley’s Toll-Like Receptor Adjuvant For Hep B Vaccine Candidate Heplisav" - Pink Sheet, 29 June, 2007.).

How Dynavax Got The Clinical Hold Lifted

FDA's red flag over the Wegener's case led to 18 months of detailed analysis of the study data, which Dina said showed "not only that there was no difference in serious adverse events or adverse events with respect to autoimmunity," but that the results were analogous to those of GSK's Engerix-B , the current standard of care.

"We fully expected to be off clinical hold at that point and so were quite surprised and in fact shocked that FDA came back and said this did not lift their concern about Heplisav potentially causing autoimmunity," he said.

Part of the problem is that the incidence rate of autoimmune events in the general population is such that any vaccine trial is likely to pick up some signal, Dina pointed out, making it difficult to suss out the safety signal in a clinical setting.

That's where the different clinical setting helped: the risk-benefit ratio is more favorable in a higher risk setting. In its resumed Phase III studies, Dynavax will target adults who are less responsive to current vaccines, including those over 40 years of age, and those with chronic kidney disease (including end-stage renal disease), HIV or chronic liver disease (including hepatitis C virus). An adjuvanted vaccine is needed in such patients, Dina explained, to improve the immune response.

The firm was summoned in January to a review meeting of FDA's vaccine division, where "I think we made a very strong scientific case for the fact that there was no proof that the vaccine had caused the Wegener event and everything else was in line with the expected rate of adverse events," he said.

Start Small, Broaden Later

Dynavax expects the post-market experience in higher-risk patients will eventually lead to Heplisav's approval for the broader population.

"At the end of the day, [FDA is] a very cautious and safety-oriented agency, and the approach of reintroducing the vaccine to the clinic and ultimately to licensure is to be progressive and gain additional insight before we expand the reach of the populations that can be immunized. We fully expect that ... we will get access to additional populations," particularly those that need immunization to Hep B because of professional exposure, Dina said.

The company expects to start a Phase III trial in chronic kidney disease patients in the near-term, and it plans to initiate a Phase III lot-to-lot consistency trial in adults over 40 years of age in early 2010. It expects to file the BLA in two years.

Dina said the good news is that "in the process we have talked to FDA so intensively ... that while we don't have a formal [special protocol assessment], I believe we have fundamentally cleared all the critical issues."

Dynavax Looking For Heplisav Partner

The firm is once again looking for a partner for the vaccine. Merck, its original partner, backed out last year shortly after FDA placed the clinical hold, determining the vaccine too risky for healthy adults (Also see "Merck Returns Heplisav To Dynavax After FDA Rules Vaccine Too Risky For Healthy Adults" - Pink Sheet, 19 December, 2008.).

Dina said Dynavax is looking to maintain more profitability than it would have under the Merck deal, which gave the Big Pharma most of the value. "Given the value that we have built in the past 18 months of investments, we believe at this point that we need and are poised to capture a very high profitability," he said.

That is perhaps an optimistic projection. Potential partners may instead sit on the sidelines until there is additional data to further de-risk the program - meaning Dynavax should be prepared to fund the trials alone in the meantime.

The company reported $24 million in cash and cash equivalents last quarter, and has access to another $23 million line of cash through Symphony Dynamo.

Dynavax stock closed at 2.55, up roughly 46 percent from the day before. Absent any partnership arising, the firm could take advantage of the increase in stock price and raise additional capitol through a follow-on public offering.

Jamie Hammon (j.hammon@elsevier.com)

FDA Lifts Clinical Hold On Dynavax's Hep B Vaccine Heplisav, Narrows Population

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