Dynavax Crashes On Unexpected Panel Vote

| About: Dynavax Technologies (DVAX)

In a move that caught many-including this writer-completely by surprise, an FDA advisory committee on Thursday, November 15, 2012, voted 13-to-1 Dynavax's (NASDAQ:DVAX) Hepatitis B vaccine Heplisav was effective, but by a vote of 8-to-5 (with one abstention), the panel voted the data were insufficient to demonstrate safety (which is different from saying the vaccine was not safe, an important distinction!).

I previously addressed the advisory committee briefing documents prepared by the FDA in an earlier article. The draft agenda, briefing papers, and other relevant documents for this meeting can be found here. Upon the release of the documents, DVAX shares jumped 70 cents before backing off somewhat, as traders and investors alike believed the agency's review portended a positive advisory committee outcome. Unfortunately, some panel members raised issues that, while not directly related to safety (that is, directly to adverse effects issues), spoke more to their desire for more safety data. Specifically, those who voted 'no' on safety wanted a large (10,000 patient) data base developed comprised of patients with more ethnic diversity and, as well, involved the co-administration of Heplisav with other adult vaccines.

It's unfortunate one or more panel members did not have the presence of mind to 'educate' their fellow panel members on trial conduct and statistical analysis (though one member did attempt to do this, as did the DVAX personnel present). That fact is, as was argued, even if the size of the populations used in the Phase 3 trial had been doubled or tripled, it was highly unlikely that events falling outside the safety envelope would have been detected.

Let's review again what the FDA's study concluded (remember, these are the Conclusions from the briefing documents):

"Study Conclusion: Immunogenicity data supporting lot consistency was shown, and HEPLISAV was non-inferior to [GlaxoSmithKline's (NYSE:GSK)] Engerix B with respect to seroprotection rates in this second pivotal study. The overall rates of solicited and unsolicited [adverse events] AEs, [non-fatal serious adverse events] SAEs and [autoimmune adverse events of special interest] AESIs were similar among the consistency lots, the older manufacturing lot TDG006, and Engerix-B. No significant differences in [anti-nuclear antibody] ANA titers or [anti-double stranded DNA] anti-dsDNA levels were seen among the different treatment arms. While the incidence of autoimmune events was low, all autoimmune AEs occurred in HEPLISAV recipients. Given the randomization ratio employed in this study and the low background incidence of many autoimmune diseases, the clinical significance of the 0.5% difference in the incidence of potential autoimmune disease between groups is unclear. Due to the reports of thyroid disorders, an independent CBER analysis revealed that thyroid related AEs were reported by HEPLISAV recipients with a frequency similar to that of Engerix-B recipients and the background incidence rate across all studies. As the numerical differences in the incidence of these AIAEs in this study did not persist upon integrated analysis of all studies, CBER determined that study DV2-HBV-16 did not reveal clinically significant safety concerns. However, it is acknowledged that the ability to reliably evaluate uncommon specific autoimmune events is limited due to the size of the study." [emphasis added]

So, therein lies the central point of the matter. By the way, in Section 6.0 Integrated Summary of Safety: Key Points, we also see:

"Integrated Summary of Safety Conclusion: Review of the local and systemic reactogenicity data, unsolicited AE and SAE data, and testing for ANA, anti-dsDNA, and c-ANCA, did not detect clinically relevant differences in safety outcomes among HEPLISAV-immunized subjects, when compared to Engerix-B-immunized subjects." [emphasis added]

Importantly, the matter of safety had already had been addressed by the company in discussions with the FDA, as evidenced by this comment found inAnd in Section 7.0 Pharmacovigilance Plan, where we find:

"Dynavax has proposed an open-label, prospective, observational study to assess the incidence of medically significant adverse events, including autoimmune disease, in 5000 individuals initiating vaccination with HEPLISAV. A concurrent population of 5000 individuals initiating vaccination with Engerix-B will be evaluated for comparison. Participants will be followed for 12 months after the first injection. In addition to this postmarketing study, Dynavax has proposed routine pharmacovigilance to identify potential risks.

"Safety was evaluated in 5845 adults enrolled in nine clinical trials: 2 pivotal studies, DV2-HBV-10 and DV2-HBV-16, and 7 supportive studies. No significant differences in safety profiles were demonstrated between HEPLISAV (n= 4425) and its active comparator (n= 1420). Review of the local and systemic reactogenicity data, solicited and unsolicited AE data; and testing for ANA, anti-dsDNA, and c-ANCA did not detect a clinically relevant safety signal in HEPLISAV-immunized subjects, when compared to Engerix-B. Most AEs were related to local and systemic reactogenicity and were mild in intensity. There did not appear to be a difference in the potential for autoimmunity between HEPLISAV and a non-adjuvanted hepatitis B vaccine comparator. However, given the relatively low incidence of many autoimmune diseases in the general population, the often non-specific initial presentation of these diseases and the limitations imposed by follow up periods, the pre-licensure safety database for this vaccine with a new adjuvant may not have sufficient power to detect rare adverse events, Additionally, the safety database for this new adjuvant is limited to the studies conducted using this product. For all of these reasons, CBER recommends further post-marketing evaluation of this product in a larger population of individuals." (emphasis added)

So, the question is: given the mixed vote of the advisory committee on safety, what will the FDA do? It would appear the company already has held extensive discussions with CBER regarding the type of post-marketing trial and evaluation sought by some panel members to understand better the safety of Heplisav. Such communications can only be viewed positively on the conclusion of a disappointing-and in some aspects-puzzling performance by some advisory committee members.

The final decision, of course, rests with the agency, which will render its decision on the announced PDUFA date of February 24, 2012 (a Sunday; whether the decision will be announced the previous Friday or the following Monday can't be known).

Technical Analysis (Thursday night)

A technical analysis at this writing is not possible. In after hours trading, the stock closed at $1.97 on 12,489,117 shares traded.

Disclosure: I am long DVAX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am long DVAX and will not alter my position within 72 hours of the time of publication of this article. I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to investors to make the correct decision after necessary research. Investing includes risks, including loss of principal.

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