Dynavax Technologies Corp said the U.S. Food and Drug Administration asked for additional safety data on its experimental hepatitis B vaccine potentially delaying its approval and sending its shares down as much as 30 percent.
Analysts said the company will be required to conduct an additional trial on Heplisav - Dynavax's most advanced clinical candidate.
Cowen and Co analyst Phil Nadeau said the outcome of Dynavax' meeting with the FDA was disappointing.
"We project a 2016 Heplisav launch and that Dynavax must spend over $300 million in R&D prior to Heplisav's approval," Nadeau said in a note.
He was expecting Heplisav to be approved for use in a limited population of hepatitis B patients next year.
Shares of the Berkeley, California-based company touched a near three-year low of $1.72 in early trade, but recovered slightly to trade down 28 percent at $1.75 on the Nasdaq.
Dynavax said it would meet with the FDA shortly to discuss the protocol for collecting additional safety data, which it expects to include in its current approval application.
The FDA denied approval for Heplisav in February saying the safety data provided by the company was insufficient to support an approval.
"We believe the FDA reasonably understands that a safety study designed to include say 30,000 patients is not economically feasible for a small company like Dynavax," CEO Eddie Gray said on a conference call on Monday.
Gray, however, added that obtaining additional safety data at a scale roughly consistent with that discussed by the FDA's advisory committee was possible.
The advisory committee said in November that data from 10,000 or more ethnically diverse patients from a higher risk population would support the vaccine's benefits.
Dynavax had included data from 5,845 patients in its marketing application.
The company has two other therapies in early-stage development. It is collaborating with GlaxoSmithKline Plc for a therapy for autoimmune disorders and inflammatory diseases. It is also jointly developing an asthma treatment with AstraZeneca Plc.
(Reporting by Esha Dey and Pallavi Ail in Bangalore; Editing by Don Sebastian and Roshni Menon)