UPDATE 2-Dynavax hepatitis C drug shows promise in phase 1 trial

* Drug SD-101 was safe and showed anti-viral response

* All patients at highest dose saw reduction in viral load

* Co says in talks with potential partners on the drug

* Shares soar as much as 23 pct (Adds company comments; updates stock movement)

By Esha Dey

BANGALORE, Jan 26 (Reuters) - Dynavax Technologies Corp DVAX.O said its experimental treatment for chronic hepatitis C infection was safe and induced anti-viral activity in patients in an early-stage trial, sending the company's shares up as much as 23 percent.

The drug developer, which focuses on infectious diseases, is currently in early talks with potential marketing partners who can help the company develop the drug, its chief business officer (CBO) told Reuters in an interview.

“This is becoming a complex, evolving area that will require a significant amount of sophistication and capital to appropriately develop the molecule,” CBO Michael Ostrach said.

The company’s hepatitis C therapy, SD-101, is designed to be used in combination with oral antivirals, including standard-of-care and emerging therapies, to stop replication of hepatitis C virus and induce a long-lasting immune response.

Hepatitis C is an infectious disease which can lead to cirrhosis of the liver.

However, Ostrach said the company’s resources, both human and financial, are currently devoted to its late-stage product, a hepatitis B vaccine, Heplisav.

“Both from an expertise, as well as a resource point of view, the development of hepatitis C therapeutic is not something that we can do right now,” Ostrach added.

Dynavax reported $46.4 million in total cash at Sept. 30, 2009.

Ostrach said the company is also in discussions with parties on possible ex-U.S. marketing partnerships for Heplisav.

Heplisav was placed on a clinical hold by the U.S. regulators in March 2008 due to safety concerns, but the hold was raised in September last year. [ID:nN09475398]


The early-stage trial evaluated four dose levels of the drug, SD-101, in 34 chronically infected, treatment-naive hepatitis C patients, and showed all the patients at the highest dose experienced a reduction in viral load, or the severity of the viral infection. Dynavax also posted the results from an in-vitro study of the drug’s mechanism of action in human blood cells.

The study showed SD-101 stimulated much higher levels of two certain types of interferons, or proteins that are released by the body in response to the presence of viruses and bacteria, compared to first-generation drugs of the same kind.

Dynavax’s Ostrach also said the company expects to report data from an early-stage trial of its experimental hepatitis B drug, DV-601, in mid-2010.

There is no cure for the hepatitis B and the only vaccine on the market is GlaxoSmithKline Plc's GSK.L Engerix-B.

Shares of Dynavax were up 11 percent to $1.66 in afternoon trade on Nasdaq. They touched a high of $1.83 earlier in the day. (Reporting by Esha Dey in Bangalore; Editing by Aradhana Aravindan)