Can Dynavax overcome Heplisav blow?

Two weeks ago, an FDA panel dealt a blow to Dynavax Technologies ($DVAX), raising concerns about the safety of the company's hepatitis B vaccine, Heplisav. Shares dropped and investors tend to turn their backs on a company when stock prices go down. But is the company's future really all that grim?

Forbes doesn't seem to think so. Sure, the company dropped 47% a week or so ago after the FDA panel gave its 8-5 decision with one abstention that safety data was inadequate. But formal regulatory recommendation might only be delayed--not refused.

Dynavax's drug has a first-in-class adjuvant that activates immune responses by targeting Toll-like Receptor 9 (TLR-9) found in a subset of immune cells--an aspect of the vaccine that had panel members worried, Forbes reports. A theoretical concern is that vaccines with adjuvants might cause autoimmune diseases, such as multiple sclerosis. But briefing documents posted by the FDA did not show a link between the TLR-9 agonist and an autoimmune response. Results from two late-stage trials showed that the risk of developing a serious adverse event in patients treated with Heplisav did not differ from those treated with GlaxoSmithKline's ($GSK) Energix-B, a similar vaccine. To put it simply, the panel's safety concerns for Heplisav are actually no worse than those presented about already approved treatments.

And the panel did agree there's a need for more hepatitis B vaccines. Now, both GSK and Merck ($MRK) have hep B vaccines on the market.

The FDA is slated to make a final decision on Heplisav on Feb. 24. The vaccine stands to make Dynavax an estimated $750 million a year, and in a growing market. Dynavax can stand to handle commercial delays through next year, too, Forbes says. On Sept. 30, the company had $148.2 million in cash due, in part, to a secondary stock offering last spring.

- see the Forbes piece
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