December 19, 2008 / 12:48 PM / 11 years ago

UPDATE 1-Dynavax ends deal with Merck for Hepatitis B vaccine

Dec 19 (Reuters) - Drug developer Dynavax Technologies Corp (DVAX.O) said it ended a global license and development deal with Merck & Co Inc (MRK.N) for its experimental hepatitis B vaccine, Heplisav.

Dynavax said it will continue to evaluate regulatory options for the development of the vaccine, indicated for adults outside of the United States and for the global end-stage renal disease markets.

In March, Heplisav trial was placed on hold after a patient receiving the vaccine was preliminarily diagnosed with Wegener’s granulomatosis, a disease in which blood vessels get inflamed.

The company expects to accelerate the recognition of about $31 million of non-cash revenue previously reported as deferred revenue, due to the termination of the Merck partnership.

Under the November 2007 deal, Merck was to get worldwide rights to Heplisav and fund future vaccine development.

Dynavax would have got an initial payment of $31.5 million and up to $105 million in development and sales milestone payment plus royalties.

Dynavax said its current cash position and strong pharmaceutical partnerships would help it continue development of other products.

Shares of Dynavax closed at $1.54 while Merck shares closed at $27.74 Thursday on Nasdaq. (Reporting by Anuradha Ramanathan in Bangalore; Editing by Gopakumar Warrier)

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