By Mary Welch

Dynavax Technologies Corp., a private firm that develops drugs based on DNA-derived molecules for use in regulating immune system responses, completed a $16.5 million private placement to finance planned clinical trials of its first drug candidate for ragweed seasonal allergy

"This should carry us for a while, if we're wise," said Dino Dina, president and CEO. "It will enable us to develop our lead product as well as use our immunostimulant technology in areas such as cancer, inflammation, infectious disease vaccines and immunotherapies. It's the same mechanism."

New investors include Axiom Venture Partners, of Hartford, Conn.; BankAmerica Ventures, of La Jolla., Calif.; and Biotechvest L.P., of Chicago. Previous investors who also participated are Alta Partners, of San Francisco; Forward Ventures, of San Diego; InterWest Partners, of Menlo Park, Calif.; and Sanderling Ventures, also of Menlo Park.

Dynavax was founded in 1996 to develop a number of discoveries made at the University of California by two of the company's founders, Eyal Rax and Dennis Carson. Their research showed that the balance between Th1 and Th2 immmune responses to a particular allergen or antigen can be specially changed by injecting certain DNA sequences into the skin or muscle.

Th1 and Th2 are helper T cells. Strong Th1 responses are necessary to kill intracellular pathogens and for vaccine effectiveness, but inappropriate Th1 responses are involved in autoimmune and inflammatory diseases. Th2 responses make antibodies that help ward off extracellular invaders, but aberrant Th2 responses are responsible for allergic reactions and asthma.

Dynavax, headquartered in Berkeley, Calif., discovered unique DNA sequences involved in triggering biochemical processes in T cells that direct immune responses toward Th1 or Th2.

Administration of certain bacterial DNA sequences into the body activates a largely cellular immune response mediated by T cells (Th1 response) rather than a B cell-mediated antibody response (Th2). Injection of these immunostimulatory sequences conjugated to protein antigens can generate a strong Th1 response and down-regulate an ongoing Th2 response to the same antigen.

"Th1 and Th2 are the two alternative pathways for the immune response. If you break the cycle and shift the balance you can cure people," Dina said.

Th1 And Th2 Implicated In Variety Of Diseases

Dynavax believes that by controlling this balance between Th1 and Th2 immune responses, it can develop new therapeutics that will correct asthma and allergies as well as a number of inflammatory illnesses and other diseases.

"One of the strengths of our company is the capability of our people," said Dina. "We have as good a chance as anyone of delivering [on our approaches]."

Dynavax's initial focus is on allergies. The company intends to enter Phase I trials in early 1999 for ragweed and Phase II in the same year.

Once the company proves its concept, it will investigate treatments of other common allergens, including cat dander and dust mites, which cause chronic allergies and asthma.

It also will study whether the technology could develop more effective vaccines against infections and cancer. The company is in talks with possible corporate partners to further this research.

Dynavax intends to develop its allergy products alone, Dina said. *