Stocks fall after hold put on approval for hep b vaxs

[Guest guest]

" lost more than half their value after the U.S. Food and Drug

Administration put a clinical hold on two approval applications for a

hepatitis B vaccine in development with Merck & Co. (MRK).

The stock plummeted another 80% in late October after the FDA told

the companies that the balance of risk versus potential benefit no

longer favored clinical evaluation of the vaccine in healthy adults

and children. "

Glaxo, Dynavax To Develop Immuno-Inflammatory Disease Treatments

December 17, 2008: 07:00 AM ET

NEW YORK -(Dow )- GlaxoKline (GSK) signed a partnership to

develop treatments for immuno-inflammatory diseases with Dynavax

Technologies Corp. ( DVAX), which could eventually reap worth more

than $800 million including all options.

Dynavax, a tiny Berkeley, Calif., biopharmaceutical company, will get

an initial payment of $10 million from the British drug maker.

Dynavax will conduct research and early clinical development in up to

four programs and could get total milestone payments of about $200

million per program.

In return, Glaxo will get an exclusive option over four programs

targeting diseases such as lupus, psoriasis, and rheumatoid arthritis.

Dynavax shares, which closed Tuesday at 26 cents, traded as high as

$6.55 in March, but lost more than half their value after the U.S.

Food and Drug Administration put a clinical hold on two approval

applications for a hepatitis B vaccine in development with Merck & Co. (MRK).

The stock plummeted another 80% in late October after the FDA told

the companies that the balance of risk versus potential benefit no

longer favored clinical evaluation of the vaccine in healthy adults

and children.

The compounds being investigated under the Glaxo partnership inhibit

certain receptors on the surfaces of cells that can induce strong

inflammatory responses from the immune system. The lead product

candidate, DV1079, is expected to enter clinical development in the

fourth quarter of 2009.

Glaxo can exercise its option on any of the programs after seeing

proof-of- concept or earlier, under certain circumstances.

Afterwards, it will further develop and commercialize the products,

while Dynavax will receive tiered sales royalties, that rise to double-digits.

Dynavax has retained an option to co-develop and co-promote one

specified product.

-By Gryta, Dow Newswires; 201-938-2053;

<mailto:thomas.gryta@...>thomas.gryta@...