Dynavax Shares Rise as Hepatitis B Shot Beats Glaxo's

--Dynavax Technologies Corp. said its experimental vaccine gave greater protection against the liver disease hepatitis B in two doses than GlaxoSmithKline Plc's did in three. Dynavax shares jumped 31 percent in late trading.

Two doses of Dynavax's Heplisav protected more than 98 percent of patients, compared with 25 percent who were protected by two shots of Glaxo's Engerix-B and 73 percent who were helped by three, Dynavax Chief Executive Officer Dino Dina said in an interview today. The company is now talking with Glaxo, Merck & Co. and other potential partners about possible deals, he said.

The study results position Heplisav to compete with Glaxo in the $1 billion Hepatitis B vaccine market, said Katherine Xu, an analyst with Pacific Growth Equities in San Francisco. Glaxo's vaccine dominates the market with $450 million in annual sales, followed by Merck's Recombivax with $270 million, she said.

``It's very powerful data,'' Xu said in a telephone interview today.

Glaxo spokeswoman Jennifer Armstrong and Merck spokeswoman Janet Skidmore both said they were unfamiliar with the new study results and could not comment about possible deals.

Invalid Patents

Glaxo and Merck hold patents in the U.S. covering Hepatitis B vaccines that Berkeley, California-based Dynavax believes are invalid, Dina said. Those patents have already been invalidated in Europe, he said.

``It's our hope that we can sort this out in a collaboration rather than a fight,'' Dina said. ``I think there's a very good chance of that happening.''

The possibilities include a licensing deal, a co-marketing agreement and the sale of either the drug or the company, Dina said.

``We're not ruling anything out,'' he said.

Dynavax plans to seek clearance to sell a two-dose regimen of Heplisav and will begin trials on that approach in Europe, Canada and the U.S. before the end of the year, Dina said. The company also plans to begin trials in people with kidney failure who are undergoing kidney dialysis, he said.

Heplisav works by stimulating the innate immune response to trigger the immune system to kill viral infected cells. It does this by stimulating Toll like receptor 9 which in turn activates T cells that will activate cascades leading to virally infected cell death.

Dynavax shares jumped to $9.73 at 7:28 p.m. in late trading after closing at $7.40 in Nasdaq Stock Market composite trading.