Dynavax plunges 50 percent on Heplisav panel vote

Dynavax shares lose about half their value as panel questions safety of hepatitis B vaccine

Associated Press

NEW YORK (AP) -- Dynavax tumbled 50 percent in Friday trading after a government advisory panel questioned the safety of its most advanced drug candidate, the experimental hepatitis B vaccine Heplisav.

THE SPARK: After the market closed on Thursday, the company said a Food and Drug Administration panel issued an opinion saying clinical trial data did not prove Heplisav is safe. Most of the panelists agreed that patients' immune systems responded to the drug.

THE BIG PICTURE: The Berkeley, Calif., company says Heplisav could work better than other hepatitis B vaccines. It is designed is given in two doses instead of three for traditional vaccines, and Dynavax says it provides protection faster than other drugs. Hepatitis B is a chronic liver infection that is spread through the blood or bodily fluids of infected people. It can cause liver inflammation and jaundice. A vaccine is available and treatment can manage the virus.

The FDA is scheduled to make a decision on Heplisav by Feb. 24. The agency is not required to follow the advice of its panels, but if often does so. If the agency agrees with the panel, the approval of Heplisav could be delayed as Dynavax seeks more data to establish the safety of the drug.

Dynavax is also studying autoimmune and inflammatory disease treatments through a partnership with GlaxoSmithKline PLC, and asthma and lung disease drugs through a collaboration with AstraZeneca PLC.

THE ANALYSIS: Cowen & Co. analyst Phil Nadeau said the panel did not identify any specific safety problems with Heplisav, but it wants Dynavax to gather safety data from more patients to rule out the possibility of rare side effects. He said the FDA will probably not approve the drug in February, resulting in "a long and large phase III" trial that could delay approval of Heplisav for three years.

SHARE ACTION: Dynavax Technologies Corp. fell $2.25, or 48.6 percent, to $2.38 in midday trading. The stock reached an annual low of $2.22 earlier in the session. On Thursday the shares peaked at $5.33, a penny off its 52-week high.

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