Dynavax (NASDAQ:DVAX) shareholders just received a big dose of devastating news. The company's hepatitis B hopeful received a mixed outcome from yesterday's FDA Vaccines and Related Biological Products Advisory Committee. After reviewing the effectiveness and safety of the vaccine, called Heplisav, the committee members voted 8-5 that, to quote Dynavax's official press release, "there was insufficient data to adequately support the safety of Heplisav."

While this wasn't the worst possible outcome from the committee (it voted 13-1 in favor of its efficacy), it's pretty darn close. Heplisav was set to become the HBV equivalent of the next best thing since sliced bread. One of the primary reasons, as my colleague Keith Speights pointed out earlier, is a more convenient dosing regimen. Heplisav reduces the required number of shots that existing vaccines like GlaxoSmithKline's (NYSE:GSK) Engerix-B require from three shots spread out over six months to two doses over one month. That's a big victory when targeting an at-risk population of adults completing all three shots only about 60% of the time.

Could we have seen this coming by reviewing the meeting's briefing documents? Read a few quotes I pulled from the materials, and form your own conclusions.

  • "The 2 most frequent systemic post-injection reactions in both treatment groups were headache and fatigue."
  • "HEPLISAV and Engerix-B had similar rates of post-injection reactions."
  • "Most injection reactions were self-limited and mild or moderate in severity."
  • "The frequencies of SAEs [serious adverse events] were similar in both treatment groups."

After reading line after line of safety data, I certainly didn't see anything overly concerning in the meeting materials. While some concerns led to a clinical hold on the program shortly after the first phase 3 trial, a thorough review found the safety results to be consistent with Engerix-B, and the hold was lifted so that the previously planned second trial could be conducted.

What's next for Dynavax? The company will hear an official FDA decision, which won't necessarily follow the committee's vote, in late February. With Heplisav's estimated sales potential around $700 million by the end of the decade, this will definitely be a decision worth watching. However, with the stock down about 60% in pre-market activity, the market appears to have voted for a complete response letter.

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