Immunotherapy developer Dynavax explores options for Hepatitis B drug - sources

Dynavax Technologies Corporation, a biotechnology company focused on drugs that harness the immune system to combat disease, is reviewing strategic options for its hepatitis B vaccine, which could include a potential sale or licensing deal, people familiar with the matter said.

The review is at an early stage and the company has made no commitment to conduct a sale or licensing process, the people said. The company may choose to go forward with its own commercial launch of the drug, they said this week.

"We remain fully committed to preparing for a commercial launch in 2018," Dynavax spokesman Ryan Spencer told Reuters. "We continue to evaluate any interest from potential partners as part of our long-term strategic planning."

A deal for the drug, called Heplisav, which is expected to receive regulatory approval later this year, would give Dynavax a cash infusion that it could use to finance its portfolio of cancer drugs under development.

In July, a U.S. Food and Drug Administration panel green-lighted Dynavax's hepatitis B drug, a strong indication that it will be approved. Shares rose around 70 percent on the news and have continued to rise.

Dynavax now trades at $21.50, more than twice its valuation before the FDA panel.

Dynavax expects Heplisav to launch commercially early next year.

Analysts expect the drug will quickly gain market share from its main rival, Engerix-B, made by GlaxoSmithKline because it is administered with fewer doses. It can further expand its market by receiving additional approvals to sell to hepatitis B patients who also have diabetes.

Meanwhile, Dynavax is working on several early-stage clinical trials on drugs that promise to use the body's own immune system to fight cancer.

Dynavax's drugs modify immune cell receptors to make them more responsive to cancer cells. The company says that they have the potential to be used in combination with other novel cancer treatments, potentially tapping them into a large and lucrative market.

Last month, biotech Gilead Sciences agreed to acquire a cancer drug developer, Kite Pharma Inc for $11.9 billion.

Reuters previously reported that cancer drugmaker Tesaro Inc, another so-called immuno-oncology company, was mulling a potential sale after receiving inbound interest.

(Reporting by Carl O'Donnell; Editing by James Dalgleish)