Dynavax Technologies Corp. inks licensing agreement with Merck, posts sour Q3
Shares of Dynavax Technologies Corp. (Nasdaq: DVAX) are jumping today after the small cap said it made an agreement with Merck & Co. (NYSE: MRK), overshadowing a widening third-quarter loss reported today.
Dynavax signed a global license and development collaboration agreement with Merck to jointly develop Heplisav, an investigational hepatitis B vaccine that is currently being evaluated in a multi-center Phase 3 clinical trial involving adults and in patients on dialysis.
Under the terms of the agreement, Merck receives worldwide exclusive rights to Heplisav, and will fund future vaccine development, as well as provide commercialization for the drug.
Dynavax will receive an initial payment of $31.5 million, and will be eligible to receive up to $105 million in development and sales milestone payments, as well as double-digit tiered royalties on global sales of Heplisav.
Dynavax, which develops Toll-like Receptor 9 (TLR9), agonist-based products to treat and prevent infectious diseases, allergies, cancer and chronic inflammatory diseases, also reported a wider-than-anticipated loss for the third quarter.
For the three months ended Sept. 30, the Berkeley, Calif.-based company recorded a net loss for the third quarter of $17.1 million, or $0.43 per share, wider than the loss of $0.37 four analysts surveyed by Thomson Financial were on average projecting. For the third quarter of 2006, the company clocked a net loss of $12.2 million, or $0.40 per share.
Dynavax said its net loss was primarily due to increased clinical development expenditures on its product candidates and overall organizational growth.
Total revenues were $1 million, compared with $1.6 million in the third quarter last year. The consensus of three analysts polled by Thomson Financial was for revenues of $7.39 million.
Going forward, Dynavax said it expects a significant increase in cash position and external funding for its R&D programs. Specifically, as a result of the company’s collaboration with Merck, funding commitment from Deerfield for Tolamba and preclinical allergy programs and a grant from NIH for a universal flu vaccine, the company now anticipates a higher cash pile for the year in the range of $87 million to $89 million, up from the previous guidance range of $38 to $42 million.
The company forecasts operating expenses for 2007 to be in the range of $76 to $84 million, while expenses for R&D programs funded by external sources are projected to be in the range of $38 to $40 million, up from the previously projected range of $29 to $33 million.
Shares of Dynavax (DVAX) gained $0.44, or 8.8%, to $5.44 at 10:54 a.m. ET. Shares of Dynavax have been trading in the range of $3.60 to $10.66 for the past 52 weeks.
