Dynavax Technologies Corporation (NASDAQ:DVAX) just reported its second quarter financials, and alongside the numbers, gave us an update as to the progress of its lead development candidate, HEPLISAV-B. The drug is a hepatitis vaccine, and currently sits with the FDA awaiting a decision as to its status. It’s had a bit of a winding development pathway, and if Dynavax can pick up a HEPLISAV-B green light come PDUFA, it will be a great result (and no doubt a relief) for the company and its shareholders alike. With this in mind, and ahead of decision day, here’s a look at the drug in question, and what an approval might mean for Dynavax.
So, the drug. It’s a mix of the surface antigen used in the current SOC hep B vaccine and a proprietary adjuvant that Dynavax has created called 1018. The vaccine works, we know that based on its SOC status, but Dynavax is trying to get a first line indication based on the impact its adjuvant has on immunogenicity, and term of effectiveness. That’s what the FDA will be looking at when it makes its decision, and what the clinical trials were designed to demonstrate.
So dud the trials support this thesis? Well, the Dynavax tested the vaccine in more than 10,000 adults across eleven clinical trials, three of which are the phase IIIs that the pending Biologics Licensing Application (BLA) is based. Across all trials, the peak induced superior seroprotection rates (SPRs), which is the standard measurement used in calculating immunogenicity in vaccines, the addition of an adjuvant improved the efficacy of HEPLISAV-B when compared to the non-adjuvant version. The company first submitted for approval back in 2012, but the FDA issued a complete response letter (CRL) early 2013, based on the safety of the vaccine. According to the response, there are concerns that novel adjuvants (in this instance, the 1018 side of the vaccine) can cause rare autoimmune conditions. Dynavax resubmitted the BLA with data that it believes can reinforce the safety of 1018, and the FDA once again accepted the filing, setting a PDUFA of September this year. This has now been delayed, however, and we are looking at a revised December PDUFA.
The data that supported the resubmission came from a safety focus phase III, which compared the company’s drug with one of the currently approved drugs called Engerix-B. Of the 33 adverse events of special interest (AESIs) in the study, 21 were adjudicated to be autoimmune events by the independent panel, with 11 reported in participants who received HEPLISAV-B and 10 in participants who received Engerix-B. So that’s pretty much in line with current SOC, and should support an approval. Secondary endpoints looked at occurrences of a couple of the rare immune conditions the FDA is concerned about, Wegener’s Granulomatosis (granulomatosis with polyangiitis) and Tolosa Hunt syndrome. Both didn’t show as part of the trial, which again should support an approval.
So what are we looking at from a timeline perspective?
There’s going to be an advisory panel review of the vaccine in November, and this is going to give us some real solid insight into the chances of approval. Whether the panel will uphold the concerns that the FDA expressed first time around, i.e. the autoimmune AEs, will be the key focus. Efficacy shouldn’t really be too much of a consideration.
Once we get the review panel’s outcome, we’ll then be looking at the PDUFA, which is slated for December 15.
Finally, a note on the market potential. There’s a definite upside on approval, and if the company can execute on a solid commercialization strategy, this upside could be considerable. Dynavax’s current market capitalization is in the $650 million region, and analysts expect peak sales of $775 million annually for the vaccine on approval.
The takeaway here is that we’ve got a company that has tried to get its lead candidate approved for four years (after completing the initial development process) and there is finally a solid end in sight. Between now and PDUFA there’s a clear catalyst in the advisory panel review, and an approval would open up a market worth more than Dynavax’s entire market capitalization.