UPDATE 2-Dynavax says FDA puts clinical hold on hepatitis B drug

(Adds details; updates share movement)

March 17 (Reuters) - Dynavax Technologies Corp (DVAX.O: Quote, Profile, Research) and Merck & Co (MRK.N: Quote, Profile, Research) said U.S. regulators have put a hold on further studies of an experimental hepatitis B vaccine, which they were jointly developing, sending Dynavax's shares crashing in trading after the bell.

Shares of Dynavax were down 34 percent at $3.44 in after-hours trade after closing at $5.22 Monday on Nasdaq.

Pharmaceutical giant Merck's stock was unhurt by the news and was trading up 42 cents in late electronic trade after closing at $41.85 Monday on the New York Stock Exchange.

The U.S. Food and Drug Administration placed two investigational new drug applications for the drug, Heplisav, on clinical hold after a patient receiving the vaccine was preliminarily diagnosed with Wegener's granulomatosis, a disease in which the blood vessels become inflamed.

A clinical hold is an order issued by the FDA to delay a proposed clinical trial or suspend an ongoing clinical trial.

No additional clinical trials with the vaccine will be initiated until the clinical hold has been resolved, the companies said in a joint statement.

The companies said they were investigating whether the patient's illness stemmed from a pre-existing condition or was related to the vaccine administration.

In November last year Dynavax announced its global license and development collaboration agreement with Merck and said the vaccine was in Phase 3 trials in Canada and Europe involving adults and in patients on dialysis.

Heplisav is the only drug in Dynavax's pipeline that was in late-stage trials. (Reporting by Ratul Ray Chaudhuri in Bangalore; Editing by Anthony Kurian and Pratish Narayanan)