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Glaxo, Dynavax To Develop Immuno-Inflammatory Disease Treatments
  Dow Jones
December 17, 2008: 07:00 AM ET
NEW YORK -(Dow Jones)- GlaxoSmithKline (GSK) signed a partnership to develop treatments for immuno-inflammatory diseases with Dynavax Technologies Corp. ( DVAX), which could eventually reap worth more than $800 million including all options.
Dynavax, a tiny Berkeley, Calif., biopharmaceutical company, will get an initial payment of $10 million from the British drug maker. Dynavax will conduct research and early clinical development in up to four programs and could get total milestone payments of about $200 million per program.
In return, Glaxo will get an exclusive option over four programs targeting diseases such as lupus, psoriasis, and rheumatoid arthritis.
Dynavax shares, which closed Tuesday at 26 cents, traded as high as $6.55 in March, but lost more than half their value after the U.S. Food and Drug Administration put a clinical hold on two approval applications for a hepatitis B vaccine in development with Merck & Co. (MRK).
The stock plummeted another 80% in late October after the FDA told the companies that the balance of risk versus potential benefit no longer favored clinical evaluation of the vaccine in healthy adults and children.
The compounds being investigated under the Glaxo partnership inhibit certain receptors on the surfaces of cells that can induce strong inflammatory responses from the immune system. The lead product candidate, DV1079, is expected to enter clinical development in the fourth quarter of 2009.
Glaxo can exercise its option on any of the programs after seeing proof-of- concept or earlier, under certain circumstances. Afterwards, it will further develop and commercialize the products, while Dynavax will receive tiered sales royalties, that rise to double-digits.
Dynavax has retained an option to co-develop and co-promote one specified product.
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