Dynavax Inc. lost a quarter of its value on Monday after reporting that the efficacy of its ragweed allergy drug could not be evaluated in a Phase III trial.

The stock (NASDAQ:DVAX) plunged 30.2 percent, or $2.58, to end the day at $5.96.

Interim one-year data from the two-year study called DARTT (Dynavax Allergic Rhinitis Tolamba Trial) showed no meaningful ragweed-specific allergic disease in any of the treatment or placebo groups, making it impossible for Dynavax to measure Tolamba's treatment effect.

"This does not at all say that the drug failed," said Deborah Smeltzer, Dynavax's vice president of operations and chief financial officer. But the future of Tolamba is unclear at this point. Dynavax is working with consultants and investigators to determine the next steps.

The drug is made up of immunostimulatory sequences linked to Amb a 1, the purified major allergen of ragweed. It is designed to suppress the Th2 cells responsible for inflammation associated with the allergy.

In all three study arms of the Phase III trial there was a minimal change from baseline in the total nasal symptom score (TNSS), the primary efficacy endpoint.

"We don't know yet what happened in this case," Smeltzer told BioWorld Today. "We were expecting to see similar results to what we had published in the Phase II/III trials."

Dynavax reported Phase IIb data in March 2006 at the annual meeting of the American Academy of Allergy, Asthma and Immunology in Miami that demonstrated Tolamba produced a statistically significant 21 percent reduction in the change from baseline of TNSS vs. placebo in the first year. The reduction was 28.5 percent in the second year.

Smeltzer said that while the TNSS in the placebo group was about 2.5 in the Phase II/III program, it was "much lower, down in the 1 range" in DARTT.

"Normally, you would expect the placebo group to have much higher allergy symptoms than the treatment group," she said. But such challenges "are not unprecedented in allergy trials."

The DARTT study is being conducted at 30 centers and in 738 ragweed allergic subjects who are 18 to 55 years old. They were randomized to receive either the same dosing regimen used in the Phase IIb trial, a higher dose or a placebo. Those in the treatment groups received six doses of Tolamba over six weeks before the start of the 2006 ragweed season.

Patients with severe cases of ragweed allergy currently are treated with a traditional immunotherapy of crude allergen extracts administered at low doses monthly over three to five years. Dynavax believes Tolamba can offer a benefit by its less frequent dosing regimen (once a week for six weeks), which has demonstrated relief in patients for up to two years. Patients with milder forms of allergy take antihistamines or corticosteroids to relieve symptoms, but the medicines "don't treat the underlying disease," Smeltzer said.

As it works to determine Tolamba's future, Dynavax also is developing TLR9 agonists such as Heplisav, a hepatitis B vaccine in Phase III; a therapy for non-Hodgkin's lymphoma in Phase II; and a therapy for metastatic colorectal cancer in Phase I. The company's stock surged on positive Phase III data of Heplisav in November. (See BioWorld Today, Nov. 30, 2006.)

In October, Dynavax raised $29.5 million in net proceeds in a public offering.

"We have over $100 million in committed cash available to us, which is over two years of burn," Smeltzer said, "so we're in a very strong financial position."

MedImmune's Second-Generation FluMist Approved

Despite an FDA complete response letter requesting more information last summer, MedImmune Inc. gained final approval of its second-generation FluMist vaccine and intends to make it available as planned for the 2007-2008 influenza season. The new refrigerated formulation - known as CAIV-T (cold adapted influenza vaccine-trivalent) - should offer physicians and schools a more convenient method for storing the vaccine. A frozen formulation of FluMist was approved in 2003.

The FDA granted approval of CAIV-T to prevent influenza in healthy children and adults from 5 to 49 years old. It issued a complete response letter last July asking for more information on data already submitted by Gaithersburg, Md.-based MedImmune. (See BioWorld Today, July 19, 2006.)

MedImmune intends to expand the label for CAIV-T to include children younger than 5. To date, the vaccine has been tested in about 60,000 people, including those as young as 6 weeks of age and adults up to 98 years old. In a pivotal Phase III trial involving 8,500 children between 6 months and 59 months, FluMist demonstrated a statistically significant 55 percent relative reduction in the incidence of influenza cause by any strain, including both matched and mismatched strains, when compared with the injectable influenza vaccine. The company filed last July with the FDA to expand the age indication for FluMist to include children as young as 1 who do not have a history of wheezing or asthma.

MedImmune's stock (NASDAQ:MEDI) rose 7 cents on Monday, to close at $34.25.

Privately Held Horizon Agrees To SPA For HZT-501

Pain therapeutic company Horizon Therapeutics Inc. reached an agreement with the FDA on a special protocol assessment for a Phase III program of HZT-501.

The product is a formulation of the nonsteroidal anti-inflammatory drug (NSAID) ibuprofen, combined with the H2 receptor antagonist famotidine. It is designed to offer pain relief while reducing stomach acidity. While NSAIDs are effective as pain relievers, they often come with serious gastrointestinal side effects such as ulcers.

Data from a pilot study published in a 1996 issue of The New England Journal of Medicine showed famotidine administered with NSAIDs significantly reduced the incidence of gastric and duodenal ulcers vs. placebo.

The Phase III program will include two trials involving 1,200 mild-to-moderate pain patients, including those with osteoarthritis. The primary endpoint will be the reduction in the risk of development of ibuprofen-associated upper gastrointestinal ulcers. The trials will be blinded for up to 24 weeks and will be followed by a four-week safety evaluation period.

HZT-501 targets the NSAID pain market, which grew more than 20 percent to 73 million prescriptions in 2005. More than 26 million ibuprofen prescriptions are written in the U.S. each year.