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

The two firms have announced a global license and development collaboration to jointly develop Heplisav, which is currently being evaluated in a multi-centre Phase III clinical trial involving adults and in patients on dialysis.

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

Dynavax chief executive Dino Dina said that in clinical trials to date, Hepsilav has conferred immunogenicity after only two doses while retaining tolerability comparable GlaxoSmithKline's Engerix-B hepatitis B vaccine. “Importantly, we expect it to be the first marketed product containing a novel toll-like receptor 9 agonist", he added.

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