On July 18, 2007, Dynavax announced that Deerfield Management, a healthcare investment fund, had committed up to $30 million in loan-based project financing to accelerate the development of Dynavax's allergy franchise, including TOLAMBA and the preclinical peanut and cat allergy programs. Repayment of a portion of the loans for TOLAMBA is contingent upon the positive outcome of the chamber study. If the TOLAMBA program is discontinued, Dynavax has no obligation to repay Deerfield up to $9 million of the funds earmarked for that program; any other remaining outstanding principal will be due in July 2010.
The initiation of dosing in the TOLAMBA chamber study triggered the release of additional funding to Dynavax pursuant to the loan agreement, as well as the issuance of warrants to Deerfield and its affiliates to purchase an aggregate of 1.3 million shares of Dynavax common stock at an exercise price of $5.75 per share.
TOLAMBA consists of Dynavax's proprietary immunostimulatory sequences (ISS) linked to the purified major allergen of ragweed, Amb a 1. TOLAMBA is designed to target the underlying cause of ragweed allergic rhinitis. The linking of ISS to Amb a 1 ensures that both ISS and ragweed allergen are presented simultaneously to the same immune cells, producing a highly specific and potent inhibitory effect and suppressing the Th2 cells responsible for inflammation associated with ragweed allergy. Since ragweed is the most common cause of seasonal allergies, commercialization of a disease-modifying therapy versus drugs that only offer short-term symptomatic relief could dramatically impact the quality of life for the approximately 40 million ragweed allergy patients in the US.
Dynavax Technologies Corporation discovers, develops, and intends to commercialize innovative TLR9 agonist-based products to treat and prevent infectious diseases, allergies, cancer, and chronic inflammatory diseases using versatile, proprietary approaches that alter immune system responses in highly specific ways. Our TLR9 agonists are based on immunostimulatory sequences, or ISS, which are short DNA sequences that enhance the ability of the immune system to fight disease and control chronic inflammation. Our product candidates include: HEPLISAV, a hepatitis B vaccine in Phase 3; TOLAMBA(TM), a ragweed allergy immunotherapy in Phase 2; a therapy metastatic colorectal cancer in Phase 1; and a therapy for hepatitis B in Phase 1. Our preclinical asthma and COPD program is partnered with AstraZeneca. The National Institutes of Health (NIH) partially funds our preclinical work on a vaccine for influenza. Symphony Dynamo, Inc. (SDI) funds our colorectal cancer trials and our preclinical hepatitis C therapeutic program and Deerfield has committed funding for our allergy programs. While Deerfield, NIH and SDI provide program support, Dynavax has retained rights to seek strategic partners for future development and commercialization. For more information, please visit http://www.dynavax.com.
This press release contains forward-looking statements that are subject to a number of risks and uncertainties, including statements about the initiation and timing of clinical trials and potential pivotal studies and BLA submission for TOLAMBA. Actual results may differ materially from those set forth in this press release due to the risks and uncertainties inherent in our business, including difficulties or delays in research and development, initiation and completion of clinical trials, the results of clinical trials and the impact of those results on the initiation and completion of subsequent trials and issues arising in the regulatory process; achieving our collaborative and licensing agreement objectives and obtaining regulatory approval; the scope and validity of patent protection and the possibility of claims against us based on the patent rights of others; our ability to obtain additional financing to support our operations; and other risks detailed in the "Risk Factors" section of our Quarterly Report on Form 10-Q. We undertake no obligation to revise or update information herein to reflect events or circumstances in the future, even if new information becomes available.