Dynavax Technologies, a clinical-stage biopharmaceutical company, is reshaping its strategy and operations to prioritize its emerging clinical and preclinical immuno-oncology portfolio. The company has implemented significant organizational restructuring and cost reductions to align around its immuno-oncology business, while allowing it to advance HEPLISAV-B [Hepatitis B Vaccine, Recombinant (Adjuvanted)], its investigational hepatitis B vaccine candidate, through the FDA review process and an approval decision. Dynavax continues to believe that HEPLISAV-B is an approvable product and plans to submit its response to the FDA's outstanding questions shortly.
To achieve these savings, Dynavax has suspended manufacturing for HEPLISAV-B and reduced its global workforce by 38%. The company will incur restructuring costs, currently estimated to be $3 million, primarily in the first quarter of 2017. The company estimates that its cash, cash equivalents and marketable securities were approximately $81.4 million as of December 31, 2016. Going forward, it expects HEPLISAV-B costs prior to any FDA decision to be less than $1 million per month, and all other operating costs to be less than $60 million per year to support continued development of its oncology program. This restructuring is currently estimated to result in approximately a 40% reduction in cash burn. The company will continue to evaluate the possibility of a partnership to support HEPLISAV-B as it increasingly concentrates its own strategic focus on oncology.
"We value all of our colleagues, so reducing our workforce is a sad and difficult decision. But it is one we believe is necessary to align our organization to reflect that of a clinical R&D-stage company with a promising immuno-oncology pipeline, which has become a strategically important area of our business and one we believe can potentially benefit thousands of people with cancer," said Eddie Gray, chief executive officer of Dynavax. "These measures will increase our financial strength and position us well to create significant long-term clinical and financial value. They also will allow us to advance HEPLISAV-B toward approval while we continue to evaluate the possibility of a partnership to support its approval and launch. We are grateful to all affected employees for their dedication to bringing us this far."
Dynavax has made notable progress in the rapidly advancing area of immuno-oncology, and is focusing on two promising compounds that have shown potential to enhance the immune response against cancer.
The company's lead clinical candidate, SD-101, an investigational cancer immunotherapeutic, is currently being studied in several phase I/II studies evaluating its potential to be broadly effective against multiple solid tumors and hematologic malignancies. SD-101, an intratumoral TLR9 agonist, has shown encouraging early clinical data in metastatic melanoma.
At the Society for Melanoma Research conference in November 2016, Dynavax announced the first findings from an ongoing phase I/II study of SD-101 in combination with Keytruda (pembrolizumab), Merck's anti-PD-1 treatment. Early results evaluating 13 patients with metastatic melanoma for efficacy and 19 patients for safety were reported. In patients naïve to anti-PD-1 treatment, objective responses were observed in four of five patients (80%), including one complete response and three partial responses. In a small number of patients with progressive disease stable disease was observed while receiving Keytruda and SD-101 in combination. The combination of the two drugs was well-tolerated with no dose-limiting toxicities. These encouraging clinical data will be enhanced by a dose-expansion phase to further explore the efficacy of this combination.
Dynavax is also developing a second TLR9 agonist, DV281, which has completed preclinical testing in models for lung cancer. Lung cancer remains an area of high unmet need, with fewer than 20% of patients responding to the most recently-approved immunotherapies. DV281 will be administered as an inhaled therapeutic. Dynavax intends to begin phase I studies of DV281 in the second quarter of 2017.
The company expects to present additional data from its immuno-oncology portfolio at medical conferences throughout 2017, including at the American Association for Cancer Research (AACR), the American Society of Clinical Oncology (ASCO) and the European Society for Medical Oncology (ESMO).
Dynavax plans to respond this month to the November 2016 Complete Response Letter (CRL) from the FDA regarding its Biologics License Application (BLA) for HEPLISAV-B, and will advance the vaccine through an expected six-month FDA review period. The company remains confident that the existing clinical data package meets the requirements for approval. During the regulatory review period, Dynavax will retain, but furlough, the majority of the workforce supporting its manufacturing facility in Germany. This approach will enable the company to leverage the existing stockpiled inventory of HEPLISAV-B, while providing it with the ability to re-activate and scale for commercial launch activities.