Pharma

GSK expands Dynavax partnership, aims for new lupus, arthritis treatments

GlaxoSmithKline (NYSE:GSK) has added a new target to its strategic partnership with California biotechnology company […]

GlaxoSmithKline (NYSE:GSK) has added a new target to its strategic partnership with California biotechnology company Dynavax Technologies (NASDAQ:DVAX) that could yield potential new treatments for autoimmune and inflammatory diseases.

With the change to the agreement, Dynavax is entitled to receive a $3 million milestone payment from London-based GSK, which has its U.S. headquarters in Research Triangle Park, North Carolina. The two companies entered a strategic partnership in 2008 to develop and commercialize compounds to treat immune disorders and inflammatory diseases. Dynavax received $10 million up front and stands to gain up to $200 million in milestones. The companies are looking to develop treatments for diseases such as lupus, psoriasis and rheumatoid arthritis.

Dynavax is developing inhibitors of “toll-like receptors,” or TLRs, which are key receptors of the immune system that can trigger strong inflammatory responses. The change to the GSK-Dynavax partnership adds the receptor TLR8 to the agreement. Activation of the TLR8 receptor can produce pro-inflammatory proteins. Dynavax’s compounds work by inhibiting inflammatory responses associated with TLRs. GSK and Dynavax are interested in seeing whether an inhibitor of the TLR8 receptor could prevent the cascading inflammatory response in autoimmune diseases such as rheumatoid arthritis. The strategic alliance is already developing inhibitors targeting receptors TLR7 and TLR9.

“Importantly, this strategic alliance has had the effect of both expanding Dynavax’s pipeline as well as providing additional financial resources over the short- and mid-terms,” Dynavax CEO Dino Dina said in a prepared statement.

The strategic agreement is an options-based deal, increasingly a preferred choice for pharma companies to partner with biotech companies. Dynavax has struck partnership deals with Novartis (NYSE:NVS) and AstraZeneca (NYSE:AZN). Depending on the progress of Dynavax’s R&D in its GSK alliance, GSK has the exclusive option to license the programs once the the inhibitors reach proof of concept, or perhaps even earlier, depending on the circumstances. If GSK licenses the programs, the pharma giant will take on responsibility for further development and commercialization of the products. Dynavax would be eligible for royalties on sales of commercialized treatments.

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