Dynavax Technologies Corp. entered its first major collaboration, signing a preclinical deal worth as much as $136 million with AstraZeneca plc.

The companies will discover and develop therapies to treat asthma and chronic obstructive pulmonary disease (COPD) using Dynavax's second-generation Toll-like receptor 9 agonist immunostimulatory sequences - or ISS.

"This is the first significant corporate deal that the company has completed," said Dynavax's CEO, Dino Dina, adding that the money committed by AstraZeneca and a financing vehicle secured earlier this year gives the company the room it needs to avoid dependence on public markets.

London-based AstraZeneca will be responsible for worldwide development and commercialization of products that come out of the collaboration, and Dynavax is retaining an option to co-promote approved products in the U.S.

The $136 million value includes $27 million in committed funding - a $10 million up-front fee and $17 million in research funding and preclinical milestones. The remaining funds will come through the achievement of clinical and regulatory milestones. Berkeley, Calif.-based Dynavax is entitled to undisclosed royalties based on product sales.

"If we meet with AstraZeneca's approval, we would be entitled to co-promote in the U.S. on a limited basis," Dina told BioWorld Today, "so that would be an alternative to the royalties."

Dynavax chose AstraZeneca as its partner because of the pharmaceutical company's successful respiratory product portfolio, which includes the asthma and COPD drug Symbicort, a combination of the inhaled steroid budesonide and the long-acting bronchodilator formoterol.

The agreement requires that the companies move a lead drug into the clinic within three years, but "it's our hope to move faster than that," Dina said, explaining that typically Dynavax strives to advance its drugs into humans within 12 months, although that will "depend on how the collaboration unfolds."

Four Phase II trials for ragweed-induced allergic rhinitis provided the basis for Dynavax to apply ISS-based agonists to treat asthma and COPD. The research has shown that the company's products can instruct the immune system to see allergens as viral proteins.

"This is then embedded into the memory cells and every time you see the allergen in the future, you actually get a therapeutic boost rather than an allergic response," Dina said. "We literally immunize people against their own disease."

Published animal data have shown that the company can treat asthma symptoms in monkeys, as well as improve the disease state, something steroids have failed to do. While everything must be demonstrated in the clinic, the preclinical studies indicate that Dynavax's TLR-9 agonists "can stop the evolution of disease and cause a regression," Dina said.

Dynavax's TLR-9 agonist-based products are designed to treat and prevent not only allergies, but infectious diseases and chronic inflammatory diseases, as well. Immunostimulatory sequences are short DNA sequences that help the immune system fight disease and control chronic inflammation. The company is developing Tolamba for ragweed allergy, which is in a Phase III trial; Heplisav, a Phase III hepatitis B vaccine; and a Phase II therapy for non-Hodgkin's lymphoma. At the preclinical stage, it is developing products for hepatitis B, hepatitis C, cancer and influenza. Funding for the programs has been provided by the National Institutes of Health and Symphony Dynamo Inc., but all remain unpartnered.

Dina said the market opportunity for asthma is large, considering steroids, bronchodilators and rescue medications bring in more than $10 billion a year worldwide. COPD, which affects about 150 million people globally, is a smaller market, but represents a "disease for which there really is no treatment," Dina said. If the company's therapies can reverse the tissue damage that results in COPD, "that would be extraordinary."

Other companies working on TLR-9 agonists include Wellesley, Mass.-based Coley Pharmaceutical Group Inc. and San Diego-based Anadys Pharmaceuticals Inc.

In April, Dynavax secured a $50 million financing arrangement with Symphony Capital Partners LP to support work on its second-generation programs in cancer, hepatitis B and hepatitis C. It licensed intellectual property from the programs to Symphony Dynamo, a separate entity capitalized by the private equity fund and its co-investors. Dynavax retained an exclusive option to reacquire the programs during the five-year agreement. (See BioWorld Today, April 21, 2006.)

Incorporated 10 years ago, Dynavax became fully operational in 1998 and has raised more than $150 million through venture capital and its initial public offering, which brought in $45 million in February 2004, selling 6 million shares at $7.50 apiece. The company's stock (NASDAQ:DVAX) fell 1 cent on Thursday, to close at $4.19.