January 5, 2017
By Alex Keown, BioSpace.com Breaking News Staff
BERKELEY, Calif. – Following the U.S. Food and Drug Administration’s November rejection of Heplisav-B, Dynavax announced a corporate restructuring that includes 38 percent of the company’s workforce. Shares of Dynavax have dropped 9 percent since the announcement.
In a statement released this afternoon, Dynavax said the reorganization will allow the company to advance Heplisav-B through an FDA review process. The company said it continues to see a way forward for the hepatitis B drug to receive regulatory approval. Dynavax said it will submit its response to the FDA’s outstanding questions sometime this month.The bulk of the workforce being terminated is based in Germany, where Heplisav-B is manufactured. The company said it will “retain, but furlough” those employees until the drug can be reviewed by the FDA.
Heplisav-B is an investigational adult hepatitis B vaccine that combines hepatitis B surface antigen with a proprietary Toll-like receptor 9 agonist to enhance the immune response. The medicine is administered twice per month, according to Dynavax. Dynavax’s Phase III data showed Heplisav-B demonstrated higher and earlier protection with fewer doses than a GlaxoSmithKline ’s Engerix-B.
Heplisav-B was originally up for review by the FDA in September, but that timeline had been pushed back as the FDA wanted more time to review the Biologics License Application. That’s on top of the FDA rejecting Heplisav-B three years ago over safety concerns.
In December, the FDA sent Dynavax a Complete Response Letter saying the regulatory agency is seeking additional information before it can move forward in the approval process. The FDA is seeking clarification “regarding specific adverse events of special interest (AESIs), a numerical imbalance in a small number of cardiac events in a single study (HBV-23), new analyses of the integrated safety data base across different time periods, and post-marketing commitments,” Dynavax said. The FDA did not request additional trials, nor did it suggest there were any safety concerns. But, the FDA’s letter said it needed more time to review the data and those clarifications must be made before the FDA will clear Heplisav-B. Dynavax said it remains confident that the existing clinical data package meets the requirements for approval.
As part of the reorganization, Dynavax said it estimates restructuring costs of about $3 million, mostly in the first quarter of 2017. The company said it expects Heplisav-B costs prior to any FDA decision to be less than $1 million per month, and all other operating costs to be less than $60 million per year to support continued development of its oncology program. As of Dec. 31, 2016, Dynavax said it has approximately $81.4 million in cash and reserves.
As the costs could run high to gain approval for Heplisav-B, Dynavax said it will continue to evaluate the possibility of taking on a strategic partnership to support drug development, something Eddie Gray, Dynavax’s chief executive officer, said in November. At the time Gray said Dynavax will have to consider taking on a partner, either another pharmaceutical company or a financial partner, to advance Heplisav-B.
This morning, Gray said the restructuring efforts will allow the company to increase its financial strength and “position us well to create significant long-term clinical and financial value.”
While the company looks to gain approval for Heplisav-B, Dynavax is also pushing its immuno-oncology pipeline, which includes the lead clinical candidate, SD-101, which is currently in Phase I/II studies. SD-101, an intratumoral TLR9 agonist, has shown encouraging early clinical data in metastatic melanoma, the company said.
Dynavax is also developing a second TLR9 agonist, DV281, which has completed preclinical testing in models for lung cancer. Dynavax intends to begin Phase 1 studies of DV281 in the second quarter of 2017.
