Dynavax Technologies and Merck today announced a deal to collaborate in developing HEPLISAV, a new hepatitis B vaccine. (Nevermind, Pamela. Apparently, you have hepatitis C. My bad.)

Under the new deal, Merck will receive the rights to the drug, as well as hold responsibility for funding future vaccine development and commercialization. Dynavax, on the other hand, gets the sweet end of the deal; the company will rake in an initial payment of $31.5 million and will be eligible for up to $105 million in sales and milestone payments, not to mention bank on any future royalties.

Dynavax's CEO Dino Dina (whose parents may have tested a bad vaccine or two, considering that name) revealed that the appeal of HEPLISAV is in the number of doses. The new drug has conferred immunogenicity after only 2 doses, compared to other hepatitis B vaccines, which usually require 3. Though children usually receive standard hepatitis B vaccines, HEPLISAV will be hyped toward adults not yet vaccinated.

Pending the completion of its final stage of clinical trials, the drug could hit the market as early as 2010.

Historically, shares of Merck peaked at $91.51 in late 2000, only to erode 72% to dock at $25.60 nearly 4 years later. Currently, shares are hovering around the 50% resistance level, nearly 20 points above its 20-month moving average. Today, Merck has reached a new annual high of $58.36.

Since hitting its annual low of $3.60 in August, shares of Dynavax have steadily inched forward, meeting support at its 10-day moving average, to gain 44%. Currently, DVAX is up more than 4.2%, trading at $5.22.

I guess there's hope for Pam, after all, as Wall Street seems confident in both Merck and Dynavax; Zacks analysts have awarded both companies 0 sell or strong sell ratings.