Recently, Dynavax Technologies Corporation (DVAX) reported data from an early-stage study (phase Ib) of its candidate DV-601 which is being developed to treat patients suffering from hepatitis B. The dose escalation trial (n=14) evaluated the safety and the immunologic and virologic responses of the candidate in patients infected with the chronic hepatitis B virus (HBV).

Data from the phase Ib study revealed that Dynavax‘s HBV candidate was safe and generally well-tolerated across all doses. Moreover, individual immunologic and virologic responses were witnessed at all dose levels. However, since the study evaluated only a few patients, no definite conclusion could be drawn about the clinical impact of Dynavax‘s early-stage HBV vaccine.

We believe that investor focus would be on the development of Dynavax‘s other HBV vaccine, Heplisav, which is in late-stage development. Heplisav is the lead candidate at Dynavax.  Earlier in the year, Dynavax presented encouraging data on Heplisav which proved to be superior to GlaxoSmithKline plc’s (GSK) HBV vaccine, Engerix-B (the current standard of care). The Dynavax vaccine (two doses over 4 weeks) displayed superior seroprotection in patients suffering from diabetes compared to Engerix-B (three doses over 24 weeks).

We note that Heplisav is being evaluated in two late-stage studies. The continuation of studies was approved by the Data Safety Monitoring Board in September 2010. One of them is a large-scale late-stage lot-to-lot consistency study. The large-scale study, which completed enrollment in May 2010, intends to show that Dynavax’s HBV vaccine is as effective as Engerix-B eight weeks after the last active dose. The other study will evaluate Heplisav in patients with chronic kidney disease.

These two studies are aimed at fulfilling licensing requirements in the US, Canada and Europe. Heplisav aims to provide increased and rapid protection, utilizing fewer doses than currently available vaccines.

Even though Dynavax carries a Zacks #2 Rank (‘Buy’ rating) in the short-run, we have a ‘Neutral’ stance on the stock in the long-term as we prefer to remain on the sidelines until there is more visibility regarding the development of Heplisav.

 
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