Dynavax regroups after FDA turns thumbs down on hep B vaccine Heplisav

The FDA has rejected Dynavax Technologies' hepatitis B vaccine Heplisav, fretting over the same safety issues that spurred an expert committee to vote against an approval last fall. In a statement, Dynavax noted that regulators want to see further evaluation of safety in the broad age group of 18 to 70, pronouncing their concerns over the possibility of rare autoimmune events among patients taking the treatment and outlining questions on process validation and the manufacturing process. But in a sliver of good news, Dynavax ($DVAX) also noted that the FDA could be open to a narrow approval in a restricted group of adults.

Dynavax's next step will be to set up a meeting with the FDA sometime in about 6 weeks, though investors bailed this morning, sending down the company's shares in a painful 38% plunge. Dynavax's bad news, even if expected, is good news for GlaxoSmithKline ($GSK) and Merck ($MRK), both of which sell hepatitis B vaccines.

Over at TheStreet, Adam Feuerstein speculated that Dynavax may have been referring to chronic kidney disease patients when the company said it could see a narrow window of opportunity for a near-term approval. Dynavax was already looking to add more data for this population post-approval.

"We had the chance to speak with the company, and it noted that there are essentially two options at the moment 1) run an additional safety study in patients aged 18-70 years, or 2) move forward with a more restrictive label (CKD or >40 years of age)," J.P. Morgan analyst Geoff Meacham noted this morning, according to TheStreet. "Of note, the request for manufacturing data comes as somewhat of a surprise, but the company is confident it can provide the requested information."

A panel of outside experts voted 8 to 5 last fall that the company had failed to clearly demonstrate the safety of the hepatitis B vaccine. In one troubling case a woman taking the vaccine had developed Guillain-Barre syndrome while another had to battle Wegener's granulomatosis. With other hepatitis B vaccines to choose from for the broad population, regulators clearly were not won over by Dynavax's case for using Heplisav in a broad population.

- here's the press release
- read the report from TheStreet

Special Report: Major FDA vaccine approvals of 2012

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