Drug Development

Dynavax shares crater after the FDA rejects Heplisav-B, again, and CEO signals for help

Eddie Gray, Dynavax CEO

Eddie Gray, Dynavax CEO

Shares of Dynavax headed south Monday morning after the biotech notified investors that the FDA has rejected its application to market the hepatitis B vaccine Heplisav-B.

Dynavax {DVAX} made it clear that the agency has not asked for any new trials and seems to be signaling that it needs more time to assess new information on the drug that has already been submitted. But after a year of ups and downs on this program, and an initial rejection dating back three years, the biotech says it needs to sign up a partner to help get this vaccine over the finish line and into the market.

Simos Simeonidis at RBC also wasn’t in the least bit happy to see Dynavax flag concerns about an imbalance in cardiac events in the data, a point that could come back to haunt the company if it lines up for a new PDUFA date soon. His note:

The imbalance in cardiac events is something we’re seeing disclosed for the first time by Dynavax, which is surprising, given that 1) cardiac events definitely fall within the more “serious” safety concern category in drug development; and 2) the company had recently disclosed that the questions it had received from FDA were “in line with expectations”. An imbalance in cardiac events in Phase III that would be significant enough to be of concern to FDA was definitely not among the expectations that investors have had for this trial and for this program.

That message did not sit well with shareholders. The biotech’s stock plunged 72% in early trading, wiping out the bulk of its market cap and signaling a deep breach with investors.

“The CRL is consistent with our opinion that HEPLISAV-B is approvable and we are seeking to meet with the FDA as soon as possible,” said Eddie Gray, chief executive officer of Dynavax. “However, the time and resources that will be required to gain approval leads us to consider that we may not be able to advance this program on our own and we are moving swiftly to identify a potential pharmaceutical or financial partner. We will maintain our efforts on the oncology programs, including our lead cancer immunotherapy candidate, SD-101, for which we recently announced encouraging early clinical data in metastatic melanoma.”

Back at the beginning of this year Dynavax laid out new Phase III data which showed that their vaccine bested GlaxoSmithKline’s $GSK rival mainstay Engerix-B.

Investigators determined that Heplisav-B provided a peak seroprotection rate of 90% among diabetics, compared to 65.1% for Engerix-B. And the entire patient group getting Heplisav-B also offered a statistically higher response: 95.4% to 81.3%. The experimental hep B vaccine also outscored Engerix-B in every subpopulation, ranging from sex, body mass index, and smoking status to age groups.

That revved up the stock and a number of analysts covering the company, though investors got the jitters recently when the FDA opted to cancel a planned AdComm meeting.



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