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Dynavax: FDA update

August 10, 2017

HEPLISAV-B approval was delayed in order to properly set up a post-marketing study.

The Advisory Committee vote of 12-1 on safety means that there’s still a good chance for approval.

The three month delay of approval, will not in any way hinder the launch date of HEPLISAV-B which is expected to hit the market in early 2018.

The autoimmune safety portion from prior CRLs were put to rest with a positive Advisory Committee vote.

The myocardial infraction issue is being addressed by the FDA in having the company run a post-marketing study that will prove safety.

 

On Thursday, in after-hours trade Dynavax Technologies (DVAX) stated that the FDA has delayed the approval date for HEPLISAV-B that was set for August 10, 2017. At first sight, this looks like bad news but it isn’t. That’s because the delay was done in order for the FDA to get more information about Dynavax’s plans for a post-marketing study. Such a study will need to be done after approval. I see this event as a huge positive, because why would the FDA want to get information about a post-marketing study if it was going to reject the vaccine. The FDA just wants more info on on a post-marketing study for HEPLISAV-B after feedback from the Vaccines and Related Biological Products Advisory Committee (VRBPAC) that convened on July 28, 2017. The new expected approval date has been pushed up to November 10, 2017.

Advisory Committee

About a week ago the advisory committee took into account the safety and efficacy of HEPLISAV-B. The final outcome of the safety vote was 12 for approval and 1 against (there were 3 abstentions). This is where the advisory committee made mention about a post-marketing study that needed to be done as a safety measure. The reason why the committee advised for a post-marketing study was to determine if HEPLISAV-B has a massive effect on cardiovascular functions in patients. The main issue that was raised was for the vaccine potentially being able to cause myocardial infraction (A blocking of blood flow to the heart muscle). These are the issues that the company must address over the next three months with the FDA.

  • Timeline for the final protocol submission, study completion and final report submission
  • Timeliness of accruing patients into the study
  • Time points for data review
  • Measures to control for potential biases between study arms
  • Updated statistical analysis plan

Risks

The biggest risk now would be if the FDA is not satisfied with the post-marketing trial design. Although, in my opinion I don’t believe that the FDA will be too harsh. As long as Dynavax creates a study protocol that meets those specifications listed above from the FDA feedback, I see HEPLISAV-B being approved. The best part of all is that even with the delay, one would think that the launch of the vaccine would also be delayed. The good news is that Dynavax stated that despite the three month regulatory delay, the vaccine is still on track to launch in early 2018 pending FDA approval.

Financials

According to the 10-Q SEC filing, Dynavax has cash and cash equivalents of $85.4 million as of March 31, 2017. Whether or not Dynavax receives FDA approval for HEPLISAV-B, it will have to dilute for cash. That is because in the filing the company anticipates that it only has sufficient cash for the next 12 months. Although, it will likely not wait until the end to raise cash. That means that there is likely to be a dilution, in the event the company can’t find a partner to funds its operations.

Conclusion

I feel that the FDA is just wanting to get a handle on the post-marketing study with the request to move up the PDUFA date. I don’t see the FDA rejecting HEPLISAV-B unless they are unhappy with the responses they receive on how the post-marketing study will be handled. About a week ago before the Advisory Committee convened to oversee recommendation of the vaccine, I wrote a Seeking Alpha article by the name of “Dynavax: Looking Ahead To A Long and Tiring Journey. In the article I discuss my logic for a positive panel opinion, and why the FDA will likely approve HEPLISAV-B for marketing approval. The main issue in the two past CRLs was that investigators were worried about increased autoimmune events in the HEPLISAV-B group. I felt that the company greatly addressed that issue before the Advisory committee took place. The only safety issue that still lingered afterwards was the myocardial infraction that was elevated in a lot of patients. I feel that the mention of a post-marketing study is just so that the FDA can cover its bases. It is wanting a post-marketing study to be safe. That is because if the post-marketing study shows anything disturbing the FDA can revoke approval of HEPLISAV-B. Even after this new update, I am sticking with the notion that the FDA will likely approve the vaccine for use. I even mentioned in that other article I wrote that the likely outcome will be an FDA approval of the vaccine with a post-marketing study. The news in after-hours trade on Thursday still proves that point.

http://bit.ly/2vRkTFQ

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