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Savoring ACIP of victory, Dynavax looks ahead with Heplisav-B; price to come


By Randy Osborne
Staff Writer

After the approval last week of Dynavax Technologies Corp.'s Heplisav-B hepatitis B virus (HBV) vaccine, backers are looking forward to the launch in the first quarter of next year and the meeting of the Advisory Committee on Immunization Practices (ACIP), which can vote to add the vaccine to its "preferred" list for easier coverage by payers.

Berkeley, Calif.-based Dynavax's shares (NASDAQ:DVAX) closed Friday at $20.25, up 20 cents, the approval of Heplisav-B having been made public after the markets closed Thursday.

Cowen and Co. analyst Phil Nadeau said the Heplisav-B label "appears favorable, as it includes results from secondary efficacy endpoints vs. Engerix-B, data on patients with diabetes, and a relatively benign treatment of the adverse-event data. We continue to think that Dynavax is undervalued for Heplisav," he added in a research report.

During a conference call with investors, Dynavax CEO Eddie Gray talked about a recent meeting of ACIP that gave him cause to believe "the arrival of Heplisav-B and the data that we have in diabetics provides the opportunity for renewed impetus" with regard to such patients, considering the recommendation that health officials made a few years ago. "I think our expectation is that we will be the vaccine of choice for such patients, and we will pick that up as we get through the back end of 2018, [when] we're securing additional doses out of our manufacturing capacity," he said. "The low-hanging fruit resides in the traditional market, and we will tackle that initially."

Chief Medical Officer Robert Janssen said on the call that he "presented ACIP at the October meeting, but because they can only vote on approved vaccines, the vote was delayed until February."

Gray said that "everybody knows who the [other] vaccinees are, and those people who need to be vaccinated turn up. The marketing challenge for diabetics is a little different, in that it is more connected to ensuring diabetics understand their need to be vaccinated and they turn up for such vaccination. So it's a slightly different challenge."

Dynavax has "always said that we would keep an open mind as to the requirements of that different challenge," he added. "We do believe that the utilization of routes such as pharmacies offer real potential. Whether or not it requires some kind of traditional sales efforts to physicians who manage diabetic patients is, I think, as yet unclear. If it becomes clear that that's part of the mix, we'll address it in an appropriate way."

Empire Asset Management said in a report Friday that "although we expect a sales ramp in 2018, we believe that due to vaccine contracting, Heplisav-B's sales in 2019 and beyond will be more reflective of the need for this vaccine."

'Torturous' FDA review

The vaccine's approval was based on data from three phase III noninferiority trials in almost 10,000 adult participants who received the vaccine. Studies compared Heplisav-B administered in two doses over one month to HBV vaccine Engerix-B from Glaxosmithkline plc (GSK), of London, administered in three doses over a six-month schedule. In results from the largest experiment, which included 6,665 participants, Heplisav-B turned up a statistically significantly higher rate of protection of 95 percent compared with 81 percent for Engerix-B.

The news was good, too, in a subgroup analysis of 961 participants with type 2 diabetes, where Heplisav-B showed a statistically significantly higher rate of protection of 90 percent compared to 65 percent for the GSK product. Across the three trials, the most common local reaction was injection site pain (23 percent to 39 percent). The most common systemic reactions were fatigue (11 percent to 17 percent) and headache (8 percent to 17 percent).

In July, members of the FDA's Vaccines and Related Biological Products Advisory Committee (VRBPAC) debated an apparent cardiovascular (CV) signal that had garnered Dynavax its second complete response letter (CRL) for Heplisav-B. VRBPAC panelists voted 12-1 with three abstentions that the available data prove the vaccine safe enough for approval, although they said the CV factor should be explored more fully in a postmarketing study. (See BioWorld, July 31, 2017.)

Dynavax has not disclosed pricing for Heplisav-B, of which, Cowen's Nadeau noted, the firm "has a stock of 250,000 vaccines ready for packaging and distribution, and enough raw material to manufacture an additional 750,000 doses." The company will make more, starting in the second half of next year, and at launch will "disperse its sales force to cover more than 75 percent of targeted institutions," he wrote.

Asked during the conference call about an ongoing intellectual property dispute regarding Heplisav-B, Michael Ostrach, chief business officer, said he does not "expect the patents controlled by GSK and Merck will prevent us from marketing Heplisav-B, and although we don't discuss details of ongoing discussions, I think it's fair to say that all three companies would agree that the best outcome for all of us will be license agreements containing reasonable royalty terms or the equivalent. You'll recall that the GSK-controlled patents expire in June or about a quarter after our launch."

Kenilworth, N.J.-based Merck & Co. Inc.'s patent "expires about two and a half years after launch, [but] Merck's out of the market, based on their announcement, for all of next year," he said. Merck has said worldwide demand caused a shortage of its Recombivax-HB.

All in, Nadeau wrote, "Heplisav's torturous FDA review – which has spanned five years, two CRLs, and two VRBPAC meetings (not including a third that was cancelled) – has ended with the HBV vaccine's approval," which "marks an important milestone in Dynavax's history, and management should be congratulated for its persistence and determination."