Two weeks ago I wrote a review of Northwest Biotherapeutics (NWBO) now (NWBO) about a possible Hollywood ending for the company. NWBio is a development stage microcap in biotech currently undergoing phase III trials for its therapeutic malignant brain cancer vaccine, DCVax-L. I made the case that, though the company is in financial straits, it has been that way for years and has little to no chance of reaching bankruptcy before the FDA has its final say on DCVax-L.
Since then, NWBio has raised $12M in an equity financing IPO of 3 million shares at $4 a share, effectively diluting its share price by roughly 40%. This drop comes just two months after a 1:16 reverse split on September 26 which triggered some very odd buying that shot the stock up from 28 cents past $20 that day and back down to settle at around $5.50. Back in September NWBO was traded on the low volume low liquidity OTC Bulletin Board, which contributed to such irrational price movements, but along with its $12M IPO, the stock has been uplisted to Nasdaq, upping its trading volume and easing price movements.
NWBio over the last 4 quarters has averaged a burn rate of a little over $12M per quarter, which means they now have enough cash to operate until March 2013, most of which is being used to fund its ongoing phase III trial. Topline results can probably be expected around Q4 2013 or early 2014, so the new money won't hold them the whole way through. There are essentially two options for the company. One is to partner with big pharma and have them fund the rest of the trials in exchange for giving up most of their revenues if DCVax gets approved. That would be unwise in my opinion because it would make it very hard for the company to repay its debt. Two is to plow through the final FDA barrier themselves and keep all the rights to DCVax. This will probably mean NWBO will have to refinance twice more, but it will be much healthier for them in the long run, as well as for its shareholders.
So far the picture I've been painting has been grim, but there is a gem here that cannot be understated. Just around the time that NWBio was having its uplisting, this story came out about a girl in the end stages of leukemia who had her immune system literally reprogrammed by disabled HIV. The experiment, sponsored by Novartis (NVS), had the girl's T-cells, an essential part of the immune system, exposed to disabled HIV in vitro carrying genes to destroy her cancer. HIV is designed to invade T-cells, so it did and reprogrammed the T-cells to kill cancer. The T-cells were re-injected, and the girl's body started to engage in an all-out war against itself. She is now cancer free.
No radiation, no chemotherapy, no surgery. Just one heck of a flu while the T-cells went on a cancer killing spree. Point being, the human immune system itself is the answer to this horrible disease.
NWBio's DCVax does not deal with T-cells, but rather dendritic cells, a more central part of the immune system, and while the success of DCVax-L is essential for the company's survival, it is really DCVax-Direct that is the Pandora's Box here. DCVax-Direct is proceeding with a phase II clinical trial in tandem with DCVax-L's phase III. The difference between the two is that DCVax-L is trained to fight cancer by introducing dendritic cells in vitro to the tumor post-surgery and fight remnants in the body to prevent recurrence. DCVax-Direct, on the other hand, is designed specifically for inoperable tumors and has shown positive results including immune response and memory in pre-clinical animal studies. (See preceding link.)
NWBio is keeping mum on how DCVax-Direct dendritic cells are trained without in vitro exposure to the tumor, and for good reason. If this phase II trial shows positive results, which could be published soon after the phase III DCVax-L results, DCVax-Direct will be a very sought after technology. Investors could start getting itchy trigger fingers and totally forget that NWBio will still have no revenues at that point and may still have to refinance.
But NWBio won't be in trouble if that happens. Cancer will. The success of DCVax-L will keep NWBio alive. The success of DCVax-Direct will put it on a different plane entirely.