GlaxoSmithKline and Dynavax Technologies have entered a worldwide strategic alliance to discover, develop and commercialize novel inhibitors of endosomal Toll-like Receptors (TLRs) for the treatment of immuno-inflammatory diseases.

Dynavax will receive an initial payment of $10 million and GSK will receive an exclusive option over four programs targeting autoimmune and inflammatory diseases such as lupus, psoriasis, and rheumatoid arthritis. Dynavax’s lead inhibitor drug candidate, DV1079, is a bifunctional inhibitor of TLR7 and TLR9, and is expected to enter clinical development in the fourth quarter of 2009.

“Our alliance with GSK provides an opportunity to create an entirely new product franchise for Dynavax,” commented Dino Dina, M.D., president and chief executive officer of Dynavax. “Our TLR inhibitors have the potential to create significant value for our newest collaborator GSK as well as for our stockholders. Alliances with major pharmaceutical companies have enabled Dynavax to establish a diverse pipeline of innovative products, while contributing valuable cash for our programs.”

Dynavax will conduct research and early clinical development in as many as four programs and is eligible to receive future potential development and commercialization milestones totaling approximately $200 million per program. GSK can exercise its exclusive option to license each program upon achievement of proof-of-concept or earlier upon certain circumstances. After exercising its option, GSK will carry out further development and commercialization of these products. Dynavax will receive tiered royalties on sales and has retained an option to co-develop and co-promote one specified product.