Dynavax Technologies Corp. released positive interim data from its hepatitis B vaccine Phase II/III trial against GlaxoSmithKline plc's Engerix-B. Add that to positive Phase II data released at the Interscience Conference on Antimicrobial Agents and Chemotherapy meeting in November, and the company is preparing for a comprehensive Phase III program for markets outside the U.S.

The news drove up Dynavax's stock (NASDAQ:DVAX) by more than 20 percent in early trading on Thursday, as high as $8.80, but it settled over the course of the day and closed at $8, up 70 cents.

"I thought [the data] were pretty good, but it's nothing I haven't seen before," said Jason Napodano, biotech analyst with Zack's Independent Research in Chicago. Referencing the positive data at ICAAC, he said he expected Thursday's data and said, "I think that's why the stock trended back down."

The trial, which is ongoing, involved 88 healthy, seronegative people aged 40 to 70 with no detectable HBV antibodies, split into two groups. The first received a 20-microgram dose of Dynavax's HBV vaccine at zero months, two months and six months; the other group received the same dose of GSK's Engerix-B vaccine at zero, one month and six months. The interim analysis was done after the second dose, and Dynavax plans to follow subjects for another five months and should complete the study in mid-2005.

But the two-dose interim results look good. The trial showed statistically significant superiority in protective antibody response and robustness of protective effect after two vaccinations, compared to Engerix-B vaccine. While the primary endpoint - seroprotection four weeks after administration of the third dose - has not been reported yet, four weeks after the second dose, 91.3 percent of the Dynavax HBV vaccine group had a protective antibody response, compared to 50 percent of the Engerix-B-treated group (p=0.0001).

Also, the Dynavax HBV vaccine group had a geometric mean titer of 539 mIU/ml, compared to 9.9 mIU/ml in the Engerix-B group. (A protective antibody response is defined in titers greater than or equal to 10 milli-international units per milliliter [mIU/ml].)

The positive Phase II data at ICAAC showed that in young adults aged 18 to 28, protective antibody responses were achieved faster and were maintained longer with Dynavax's HBV vaccine than with Engerix-B, Dynavax said. Put that with Thursday's interim results and Dynavax is gathering data for a wide swath of the population.

"We are pursuing independent strategies for different populations because [the populations] probably will entail different regimens," said Dino Dina, president and CEO of Berkeley, Calif.-based Dynavax. "We're going to have a series of Phase III trials, and our feeling is that the first one will be in the same population that we reported on [Thursday]."

The second trial, Dina said, most likely would be those in the 18- to 40-year range, and then another trial for adolescents - a "key group, as they become sexually active." The projected amount of people in each trial figures to be 400 to 500, but Dynavax will need safety data for "several thousands," Dina said.

The vaccine is targeted at ex-U.S. markets, valued overall at about $500 million. But Dynavax is "reviewing strategies to bring the vaccine into the U.S.," Dina said.

The HBV vaccine incorporates Dynavax's immunostimulatory sequence (ISS) technology, co-administered with the HBV surface antigen. The ISS technology uses short synthetic DNA molecules designed to stimulate Th1 immune response while suppressing Th2 immune response.

The two main competitors for Dynavax's HBV vaccine are both pharma products - Recombivax-HB, made by Whitehouse Station, N.J.-based Merck & Co. Inc., and Engerix-B. Merck does not specifically break out individual vaccine sales in its earnings, but GSK has four hepatitis vaccines in its product portfolio, including Engerix-B, and for the three months ended Sept. 30, that group brought in $186 million, $95 million of that from Europe.

Looking at the data, Napodano conceded that "it's always difficult to take market share," but said "anytime you can offer improved dosing and improved efficacy - yeah, that's a better drug." He said if and when the vaccine is approved, it "will take some share, it's just a question of how much."

Dynavax has an agreement with Berna Biotech, of Bern, Switzerland, in which Berna supplies clinical and commercial HBV surface antigen. It also gives them an option to participate in marketing.

"They will have an ability to sell and promote on our behalf where they have a presence," Dina said, meaning some European countries and South Korea. That agreement will have to be reviewed, he said, and added that marketing in the rest of the world will be done via geographical alliances, although a global alliance also could occur.

"We are not going to set up our own sales force," he said.

Dynavax has a ragweed allergy Phase II/III trial that is expected to turn out an interim analysis in the first quarter, but another trial will be needed. An asthma program has reached Phase II and next will go into Phase IIb to better define an endpoint for a Phase III study. Dynavax's other work includes pandemic flu and anthrax vaccines, both in preclinical work and financed by the National Institutes of Health in Bethesda, Md.

Napodano is neutral on the stock right now, but he likes the ISS platform.

"It's a neat little mechanism, and they've demonstrated that it is safe and tolerable," he told BioWorld Today. "And it might be an efficacy booster, so there are some interesting things going on. I have a hold' on the stock because it's hard to get excited before anything gets to Phase III or the market.

"They've been flying below the radar for a little bit, but there is potential there for the long term."

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