Before the opening bell this morning, Dynavax (DVAX) reported feedback from the company's meeting with the FDA. This followed the receipt of a complete response letter (CRL) last February regarding its biologic license application (BLA) for Heplisav, the company's revolutionary and highly effective vaccine for hepatitis B. According to the press release, the meeting with the FDA resulted in the following "messages":
- The safety database does indeed need additional subjects;
- VRBPAC's strong endorsement of HEPLISAV's demonstrated immunogenicity was acknowledged;
- Analyzing the benefit/risk of HEPLISAV's use in discrete patient populations did not fundamentally address the shortfall in the safety database. It was concluded that to do so would unnecessarily restrict the patient population that could benefit from HEPLISAV's approval;
- The additional safety data collected would facilitate review for an indication in adults 18-70 years of age.
Eddie Gray, Dynavax's new Chief Executive Officer (who only 4 months ago took over responsibility for the company) provided some clarity on the meeting with the FDA through his prepared remarks as well as through his answers to analyst questions. (You can listen to the call here.) Most questions centered on the additional clinical trial that would be required to address the FDA's concerns regarding safety. Here, Gray indicated discussions with the agency were consistent with what had previously been raised in the Vaccines and Related Biological Products Advisory Committee (VRBPAC) advisory committee meeting held in November last year. At that time, though a post-approval trial involving 30,000 patients was discussed during the advisory committee meeting - a number the FDA appeared to acknowledge this month as perhaps not being feasible (the company had first proposed 5,000 in its submission last year) - a more reasonable number on the order of 10,000 patients was hinted at being more plausible. Regardless, given that the company had yet to develop the protocols for such a safety trial, it was premature to discuss such numbers, according to Gray.
Note, by the way, that in the FDA briefing documents for the November 15, 2012, advisory committee meeting, the FDA stated: "HEPLISAV has a favorable benefit/risk profile for the vaccination of adults at risk for hepatitis B infection." [p. 90 of 144] And: "The safety profile of HEPLISAV was similar to that of Engerix-B with respect to [adverse effects] AEs." [p. 92 of 144] Engerix-B is GlaxoSmithKline's (GSK) treatment for Hep-B which was used in the comparator arm of the Heplisav trials. So, let us be clear: nothing the FDA has seen says Heplisav presents a greater risk to patients than does the current standard of care. What the agency wants is additional safety data upon which to base approval.
Importantly, one question raised by an analyst had to do with whether or not the additional safety trial required would be single-arm in nature ... something that would significantly reduce both the cost and time required to complete. Again, Mr. Gray indicated it was premature to speculate upon what the company and the FDA would agree.
The company's application for Heplisav to the European Medicines Agency (EMA) continues to move forward. According to Gray, they are in the process of answering the questions received from the agency. None was related to actions taken by the FDA.
I estimate US approval has been delayed by 2 years, this despite the fact Heplisav is a vastly superior treatment for both Hep B and chronic kidney disease (CKD), especially in hard-to-treat populations. Compared to GSK's Engerix-B, for example, the current standard of care, Heplisav provides faster, higher and longer lasting protection. As well, Heplisav is safe (based on the studies run to date) and well-tolerated. You can see actual data here comparing the two treatments.
Finally, nearer-term catalysts could involve European approval as well as a strategic partner on the continent.
The Daily and Weekly charts, courtesy StockChart.com, show the stock falling to the levels seen following the November, 2012, advisory committee meeting.
Additional disclosure: I am long DVAX. 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.