Merck & Co has linked up with Dynavax Technologies Corp to developthe latter’s hepatitis B vaccine Heplisav in a deal that could be worthup to $136.5 million.

Thetwo firms have announced a global license and development collaborationto jointly develop Heplisav, which is currently being evaluated in amulti-centre Phase III clinical trial involving adults and in patientson dialysis.

Under the terms of the agreement, Dynavax willreceive an initial payment of $31.5 million, and will be eligible toreceive up to $105 million in development and sales milestone payments,and double-digit tiered royalties on future sales of Hepsilav. TheBerkeley, California-based firm will continue to manage the studies andbe responsible for the manufacturing of the hepatitis B surface antigencomponent of the vaccine for Merck, which will be produced at DynavaxEurope's Dusseldorf, Germany plant “and later at a new facility tosupport expected market needs”.

Dynavax chief executive DinoDina said that in clinical trials to date, Hepsilav has conferredimmunogenicity after only two doses while retaining tolerabilitycomparable GlaxoSmithKline's Engerix-B hepatitis B vaccine.“Importantly, we expect it to be the first marketed product containinga novel toll-like receptor 9 agonist", he added.

MargaretMcGlynn, president of Merck’s vaccines and infectious disease unit,said that the firm “has been a leader in the field of hepatitis Bprevention since we introduced the first recombinant vaccine,Recombivax, in 1986”, and through this collaboration with Dynavax, “wehave the potential to add another important advance” to the firm’sbroad portfolio of vaccines.