Shares of Dynavax Technologies Corp. jumped 34 percent after the company reported two-year data from a Phase II/III trial showing that its disease-modifying allergy drug, Tolamba, significantly reduced symptoms compared to placebo.

The trial randomized 462 patients into three arms: those receiving six weekly injections of Tolamba prior to the 2004 August to October ragweed allergy season, those receiving the same injections plus a booster before the 2005 season, and those on placebo. The drug met its primary endpoint, showing that patients in the Tolamba-treated group had a statistically significant reduction in total nasal symptoms vs. placebo. Secondary endpoints demonstrated significant clinical benefit, including a reduction in hay fever symptoms and ocular effects, as well as a reduction in antihistamine use.

Those data reflect the single course of therapy before the first ragweed season and demonstrated that a booster dose before the second season was not needed to maintain clinical benefit. In fact, patients who received the booster did not achieve statistical significance compared to placebo, and those results were "both exciting and puzzling," said Dino Dina, president and CEO of Berkeley, Calif.-based Dynavax.

The company entered the study with results from two Phase II studies under its belt, and an "intriguing" observation that suggested Tolamba's long-term efficacy.

"One year of treatment produced efficacy in the second year, and that efficacy was measurably superior to the vaccine in year one," Dina told BioWorld Today. "So we postulated that exposure to the allergen essentially boosted the response once we had affected the reprogramming of the immune system."

He added that the company would be investigating the results from the booster arm. The upcoming pivotal Phase III trial likely will base its primary endpoint on a one-dose regimen, though Dina said a booster group would be included to confirm the trends seen in the Phase II/III data.

Though there were a few concerns related to Tolamba booster results - New York-based JMP Securities downgraded the company from "market outperform" to "market perform" - Wall Street seemed impressed by the overall results. Shares of Dynavax (NASDAQ:DVX) climbed $1.48 Thursday to close at $5.83.

Analyst Katherine Xu, of San Francisco-based Pacific Growth Equities LLC, wrote in a research note that the positive Phase II/III data "potentially validated the Tolamba concept based on" Dynavax's Toll-like receptor-9 technology platform, which could create other products to "form a strong and rich pipeline in the allergy area."

The company's technology is based on its short synthetic DNA molecules (ISS) designed to stimulate a Th1 immune response through the interaction of TLR-9. The idea is to "reprogram" the immune responses, as opposed to treating or managing the symptoms through chronic administration of antihistamines, corticosteroids or antileukotriene products, Dina said.

With Tolamba, "we essentially link the TLR-9 agonist with the allergen and instruct the immune system to see the allergen as a virus or bacteria, causing a Th1 response," he said. That response gets "imprinted into cell memory, effectively reprogramming how the immune system reacts."

And, Dina said, studies also suggested that the drug affects only the T cells, leaving the rest of the immune system free to fight off invading pathogens.

A detailed breakdown of the Phase II/III data is expected to be presented in March at the American Association of Allergy, Asthma and Immunology meeting in Miami.

The company expects an end-of-Phase-II meeting with the FDA by the end of the quarter, and Dina said everything is in place to begin the Phase III trial. Depending on the results of the pivotal study, the company could file for regulatory approval in the second half of 2006.

Right now, the company is funding Tolamba development itself, though it is actively seeking a partner to share some of those costs.

"We're well capitalized," Dina said. "But we're also a small company that has two major products going into Phase III."

In addition to the allergy immunotherapeutic, Dynavax has a hepatitis B drug, Heplisav, in a Phase III program. The first study began in June, involving 400 patients, and a second trial is expected to begin this year. Heplisav also emerged from the TLR-9 platform.

Earlier in its pipeline, Dynavax has a cancer therapy in Phase II development and an asthma immunotherapeutic that has demonstrated preliminary safety and pharmacology data in a Phase IIa study.

The company had $50.7 million in cash at the end of the third quarter and closed a public financing in the fourth quarter to bring in an additional $33 million.

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