Dynavax Technologies Corp. (DVAX) announced that the company has amended its existing research and license agreement with AstraZeneca plc (AZN).

As per the agreement, AstraZeneca will now provide full funding while Dynavax will conduct a phase IIa safety and efficacy trial on pipeline candidate AZD1419 in asthma patients.

Dynavax plans to initiate the study in the first half of 2015. The company is entitled to a milestone payment on its initiation along with potential milestone payments worth $100 million.

Based on positive results from a phase Ia study with 45 volunteer patients, both the companies decided to accelerate the candidate straight into a phase II study instead of the previously planned phase Ib study. The primary endpoint of the trial was to assess the safety of four weekly doses of AZD1419 compared to placebo. The results of the study showed that the ascending doses were well tolerated and no serious adverse events were observed in treated subjects.

Moreover, Dynavax will receive royalties on worldwide sales of any approved products resulting from the collaboration and have the opportunity to co-promote in the U.S.

Meanwhile, the company continues to progress with its pipeline. Earlier last month, Dynavax received encouraging news when the independent Data and Safety Monitoring Board recommended the continuation of the phase III study without any changes on its lead candidate, Heplisav-B (adult hepatitis B vaccine).

We expect investor focus to remain on pipeline updates from the company.

Dynavax currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Amgen Inc. (AMGN) and Biogen Idec Inc. (BIIB). Both carry a Zacks Rank #1 (Strong Buy).

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