Northwest Biotherapeutics: Academic Results Create Positive Risk/Reward

Summary

An extensive analysis of peer-reviewed studies over the last 15 years shows strong evidence of effect seen with whole tumor lysate loaded dendritic cell vaccines (such as DCVax-L).

Superior vetting of manufacturing capabilities and regulatory validations make NWBO stand out from its competitors.

Sales potential and risk/reward ratio of DCVax-L provide additional impetus for investment.

A sound basis for investment in any publicly traded bio technology company should entail a thorough review of the following: veracity of technology, regulatory validations and validations from academia (peer-reviewed journals, etc.), comparison with competitors, manufacturing viability, and risk/reward ratio.

Regarding Northwest Biotherapeutics (NASDAQ:NWBO), I shall run through each in course and offer my conclusions at the end. I will assume readers are privy to the overall technologies in question, namely DCVax-L and DCVax-Direct, NWBO's two frontline therapies. But if not, there is up-to-date information of these on its website and in its latest corporate presentation.

Veracity From Academia on Tumor Lysate-Pulsed Dendritic Cell (DC) Vaccines (analog to NWBO's DCVax-L), and Activated, Intratumorally Injected DC Vaccines (analog to NWBO's DCVax-Direct):

As DC vaccination currently has no FDA or other regulatory body approval on its use in the greater patient population, the testing of this vaccine has been limited to early-stage clinical trials and academic studies, which are often comprised of patients with very advanced, hard-to-treat cancers, with limited treatment options and near 100% mortality rates. Despite this, and where all other "effective" therapies have failed, the effectiveness and safety of DC vaccines utilizing whole tumor lysate have been repeatedly confirmed.

Cumulative data from a variety of sources has been used to verify claims in other studies. For example, in "Pseudoprogression: Relevance with Respect to Treatment of High Grade Gliomas," by Fink J, et al, their methods were noted as: "A literature review searched specifically for 'pseudoprogression' within the last 5 years (2005-2010)," whereby researchers reviewed various studies' data and gave collective demographic rates based on them.

Also, in "Advanced Therapy Medicinal Products and Exemptions to the Regulation 1394/2007: How Confident Can We Be? An Exploratory Analysis," by Van Wilder et al, their methods were noted as: "We started by checking the EMA-website (European Medicines Agency, 2012) for authorized ATMPs till December 2011. We then searched the medical literature published on 'EC authorized' and on 'non-EC authorized' ATMPs," and they likewise used various studies' data to draw conclusions on the use of the Hospital Exemption program in Europe and its possible implications.

Following their example, I likewise searched for all published scholarly articles on "tumor lysate-pulsed DC vaccine" (such as in DCVax-L) and "intratumorally injected DC vaccine" (such as in DCVax-Direct). Below is an overview of a number of these studies' findings. This will cover both "veracity of technology" and "validations from academia" above.

DCVax-L/DCVax-Direct Analogs:

In 2004, Yu et al treated 14 patients diagnosed with recurrent GBM (median OS w/ SOC is 6 months) with tumor lysate-pulsed DC vaccine. No adverse events were reported. Substantial immune responses were identified (particularly T-cell infiltration). Median OS in patients treated with DC vaccine was 133 weeks (2 years and 7 months)--more than 2 years' improvement over Standard of Care (SOC).

In 2010, Linda Liau (professor and vice chair of Neurosurgery and director of the UCLA Brain Tumor Program, founder of DCVax-L technology and principal investigator in their current Ph III DCVax-L trial) et al treated 23 patients with glioblastoma (WHO grade IV -- 15 with newly-diagnosed GBM, and 8 with recurrent GBM) with three biweekly injections of tumor lysate-pulsed DCs, followed by booster vaccinations with either imiquimod or poly-ICLC adjuvant every 3 months until tumor progression. This study has been succeeded by a current Ph II enrolling 60 patients (making it 83 total), to be completed concurrent with the DCVax-L Ph III trial, and may be used to file a supplemental BLA for use of these booster vaccinations as adjuvants.

This DC vaccine is the same that showed high efficacy in 39 patients previously in a Ph I/II trial for GBM, and which is currently being tested in NWBO's ongoing 312-patient Ph III trial. It was developed by Dr. Liau and others out of the world's premier GBM treatment and research facility (ranked #1), UCLA Health.

No adverse events were reported. Historic median time to progression (NYSE:TTP) in a 2:1 ratio of newly-diagnosed and recurrent GBM patients respectively (using ratios mirroring the study) is 5.5 months. Historic median overall survival (OS) in a 2:1 ratio of newly-diagnosed and rGBM respectively (using ratios mirroring the study) is 11.8 months.

The median TTP and OS from the time of initial surgical diagnosis of GBM in these 23 patients treated with whole tumor lysate-pulsed DC vaccine and booster shot was 15.9 months and 31.4 months respectively, with a 1-, 2-, and 3-year survival rate of 91%, 55%, and 47%, respectively (nearly 3x SOC).

In 2002, Timmerman et al treated 35 patients with follicular lymphoma using dendritic cells (DC) pulsed with tumor-derived Id protein (tumor lysate). Among 10 initial patients with measurable lymphoma, 8 mounted T-cell proliferative anti-Id responses, and 4 had clinical responses -- 2 complete responses (NYSE:CR) (progression-free [PF] for 44 and 57 months after vaccination), 1 partial response (PR) (PF for 12 months), and 1 molecular response (PF for 75+ months).

Subsequently, 25 additional patients were vaccinated after first chemotherapy, and 15 of 23 (65%) who completed the vaccination schedule mounted T-cell or humoral anti-Id responses.

Among 18 patients with residual tumor at the time of vaccination, 4 (22%) had tumor regression, and 16 of 23 patients (70%) remained without tumor progression at a median of 43 months after chemotherapy. Six patients with disease progression after primary DC vaccination, and tumor regression were observed in 3 of them (2 CRs and 1 PR). No adverse events were reported.

Their conclusion: "tumor lysate-pulsed DC vaccination can induce T-cell and humoral anti-Id immune responses and durable tumor regression."

In 2002, Holtl et al treated 35 patients with metastatic renal cell carcinoma with tumor lysate-pulsed autologous dendritic cells. Treatment was associated with transient flu-like symptoms (no adverse events -- fever is typical, and indicative of immune response).

In 2 of 27 evaluable patients, all evidence of disease disappeared (complete response). In both cases, metastatic tissue had been the source of tumor antigen. One patient had an objective partial response (over 30% reduction in tumor load). Seven patients had stable disease, while the remaining 17 patients had progressive disease (thus, over 50% positive response rate [positive response of "effective" therapies approved by FDA in such indications range from 5%-30% -- thus, 50% is exceptional]). No adverse events were reported.

In 2007, Ovali et al treated 18 patients with relapsed or refractory cancer. They were vaccinated with DCs pulsed with 100 μg/ml of tumor lysate. All subjects were advanced stage IV cancer patients of various indications, for whom no other treatment options were available (highly difficult responders).

8 patients showed positive response (1 complete remission, 4 near-complete remissions (>75% reduction in tumor mass, without the development of new metastatic lesions)), 2 partial remissions (>50% reduction in tumor mass w/out new lesions), and 1 stable disease (tumor reduction less than 50% w/out new lesions).

10 patients showed varying levels of response (some reduction amidst new lesions, or disease progression), and were classified as "no response." Tumor response and immune responses correlated with an increase in clinical response (overall survival).

They observed 4 (22%) objective clinical responses (one CR and one NCR, two PRs) and 8 (44%) clinical responses (4 objective clinical responses + 4 PA -- positive alteration). Objective clinical response rates of some large cancer vaccine studies range between 2.6%-32%. No adverse events were reported.

In 2002, Hernando et al treated two patients with uterine sarcoma and six patients with ovarian carcinoma with intracutaneous injections of antigen-pulsed DC vaccine. Median PFS in recurrent late-stage ovarian cancer is historically around 9 months.

Median PFS in recurrent late-stage ovarian cancer patients treated with tumor lysate loaded DC in this trial was nearly 22 months (one patient requested another round of vaccinations upon recurrence, having gone almost 4 years disease-free after treatment with the DC vaccine. She then went another 2 years before her second recurrence -- 6 years later, and was still alive by the publishing of this study). No adverse events were reported.

In 2006, Salcedo et al treated 15 patients with metastatic melanoma (stage III or IV) with four subcutaneous, intradermal, and intranodal vaccinations of DC loaded with tumor cell lysate. No adverse events were reported. Four out of nine patients who received the full treatment survived for more than 20 months.

Two patients showed signs of clinical response and received 3 additional doses of vaccine: one patient showed regression of in-transit metastases, leading to complete remission. Eighteen months later, the patient was still free of disease. The second patient experienced stabilization of lung metastases for approximately 10 months.

Overall, their results show that "vaccination with DC loaded with tumor lysate was well-tolerated and effective in this group of advanced melanoma patients."

Recently, in May 2014, Everson et al reported that Cytokine responsiveness of CD8+ T cells is a reproducible biomarker for the clinical efficacy of dendritic cell vaccination in glioblastoma patients.

28 patients were enrolled and treated in two different Phase I DC vaccination clinical trials at UCLA. They also noted that DC vaccination reproducibly induced elevated IL-2 (pSTAT-5) responsiveness, the magnitude of which was also directly associated with survival (17.25 months vs. 46.3 months).

Meta-analyses also demonstrated that vaccination with whole-tumor antigens induced higher objective clinical responses than vaccination with defined tumor antigens (such as with IMUC's ICT-107, validating again their differences regarding clinical efficacy).

CD3 + CD8+ T cells whose responsiveness to IL-2 was elevated after DC vaccination compared with before DC vaccination had significantly longer overall survival than patients whose CD3 + CD8+ T cell responsiveness to IL-2 did not change.

Based on this correlation, a one-unit increase in the ratio of the pSTAT-5 ratio (post-to-pre DC vaccination) from IL-2-stimulated cytotoxic T-cells following DC vaccination reduces the risk of death in vaccinated patients by 5.45 times over SOC (in the case of this extreme advantage over SOC, namely 5 ½ x increased OS, it is in the identified subgroup tested, which is estimated to represent 20%-30% of the GBM population)

Across the board, a 2-year median OS advantage over SOC was noted (as was seen in NWBO's early-phase trials). In specific patient analysis, it was noted that not only did this fantastically responsive subgroup receive benefit, but nearly all did (proneural, etc.).

In 2013, a private Austrian company conducting a Ph II trial testing whole tumor lysate-loaded DC vaccination (AV0113) on 100 patients with GBM reported promising ongoing results.

At 12 months, 21/33 (64%) of patients in the treatment group and 17/35 (48%) of patients in the control group were still alive. At 18 months, 8/15 (50%) of patients in the treatment and 6/18 (33%) of patients in the control group were still alive.

Being also a whole tumor lysate-loaded DC vaccine, these results would more likely mirror DCVax-L than those of IMUC's ICT-107, which utilizes only 6 synthetic "antigens," which are actually peptide fragments. DCVax-L and AV0113 have the advantage of loading DCs with the entire profile of tumor antigens (scores to hundreds). This produces a more effective vaccine (as referenced above).

In 2009, a peer-reviewed study was performed on DCVax-Brain (now termed DCVax-L) clinical data and related DC vaccines to-date. Their observations were:

"Published DC vaccine trials for high-grade glioma patients suggest favorable clinical outcomes not easily ascribed to non-treatment parameters. Evidence of possible selection bias exists in many reports, but efforts to account for this are evident in the most recent publications. Conclusion: DC vaccine trials provide evidence of low toxicity in GBM patients and effective induction of antitumor immunity in the latest publications correlate with clinical improvements. Preliminary reports on DCVax-Brain clinical outcomes seem to follow these trends."

Cutaneous T-cell lymphoma (CTCL) is a lymphoproliferative skin disease with limited therapeutic options. In 2003, Maier et al treated 10 CTCL patients with once-weekly intranodal injection of 1 × 106 mature monocyte-derived dendritic cells pulsed with 100 μg/mL tumor lysate protein.

Five of 10 (50%) patients had objective responses. Four patients had partial responses (PRs). Two are still in PR, and the other 2 patients had a mean PR duration of 10.5 months. One patient had a complete response for 19 months that is ongoing. The remaining 5 patients had progressive disease. In the 5 responder patients, 6.8 ± 1.4 vaccinations were necessary to induce an objective clinical response. Response was associated with low tumor burden. Continuation of vaccinations with new tumor lysate derived from progressive lesions reinduced treatment responses in 2 patients in PR.

Selected patients had massive infiltration of CD8+ and TIA+ cytotoxic T cells at the site of regressing lesions, and molecular remission after therapy. No adverse events were reported

Conclusion: "Intranodal injection of autologous tumor-lysate-pulsed DCs is well-tolerated and achieves immunologic and objective clinical responses in selected CTCL patients."

In 1999, Thurner et al treated 11 far advanced-stage IV melanoma patients, who were progressive despite standard chemotherapy, with DCs pulsed with Mage-3A1 tumor peptide and a recall antigen. Only minor (less than or equal to Grade II) side effects were observed. Regressions of individual metastases (skin, lymph node, lung, and liver) were evident in 6/11 patients.

Conclusion: "This study proves the principle that DC vaccines can frequently expand tumor-specific CTLs and elicit regressions even in advanced cancer and, in addition, provides evidence for an active CD8+ CTL-tumor cell interaction in situ as well as escape by lack of tumor antigen expression."

In 2005, Chi et al treated 12 patients with advanced/metastatic stage hepatoma not suitable for surgery (advanced late stage, terminally ill patients) with direct intratumoral injection of autologous immature dendritic cells. Two cycles of injections were given over 3 weeks. 10 patients had completed response evaluation 2 weeks after the second cycle of vaccination.

At that time, there were already seen two partial responses (over 30% tumor reduction) and four minor responses (10%-30% tumor reduction), showing a 60% positive response.

The AFP-specific immune response was evident in 8 patients examined by cytokine release assay and in 7 patients by ELISPOT assay.

In 2000, Triozzi et al treated 7 patients with melanoma and 3 patients with breast carcinoma with intratumoral injection of dendritic cells. Regression of the injected tumors, beginning as early as 4 days after injection, was observed in 4 patients with melanoma and in 2 patients with breast carcinoma.

Biopsies of regressing lesions showed lymphocyte infiltration associated with DCs and necrosis.

One patient (Patient 8) with melanoma manifested a complete response of the injected tumor and eight other 0.5-1.0 cm non-injected satellite lesions within a 6-cm radius of the injected tumor, showing an immune response.

6 of 10 patients showed at least 50% reduction in injected lesions - 1 of 10 had 25% reduction in injected lesion.

Taken together, these peer-reviewed, independent studies provide data on 217 patients (the size of a large Ph II trial, for which accelerated approval (NYSE:AA) could very well be granted with positive results) showing marked effectiveness of therapy with whole tumor lysate-loaded DC vaccines. This further validates NWBO's technology, and leads one to the logical conclusion that the probability that DCVax-L is showing similar effectiveness in its blinded Ph III trial, coming near to completion (September 2014), is quite high.

This is in addition to the Company's earlier studies using whole tumor lysate-loaded DC vaccines (DCVax) to treat GBM, prostate, and ovarian cancers, totaling 81 patients, which showed 2-3x benefit, on average, over SOC -- even across multiple indications (a confirmation of effective therapy often required by FDA in transitioning from AA to full approval). That would bring our grand total to 298 patients in this paper alone.

A full meta-analysis of all patients treated in peer-reviewed studies with whole tumor lysate-loaded DC vaccines would easily eclipse 1,000 patients, and is beyond the scope of this paper.

As an aside, DCVax-Direct's preliminary results show the vaccine is off to an effective start in treating far advanced metastatic cancer patients for whom no other treatment options exist. In fairness, it is too soon to really comment accurately on any of the data. A better look can be had sometime late in 2015. But these preliminary results do appear compelling in their own right.

In summary, the growing body of evidence is readily apparent in academia, and only the difficulty in manufacturing has kept this therapy from being sponsored in late-stage clinical trials that may vie for regulatory approval. But what once took many months to produce for each patient can now efficiently be made with NWBO's patented manufacturing processes in only 8 days.

Manufacturing and Regulatory Validation of DCVax

Manufacturing is a key process in achieving regulatory approval of a drug, and it is especially important in receiving approval of a biologic (such as DCVax, which is an advanced therapy medicinal product, or ATMP). The process must be intensely vetted and found consistent in all applications of cell therapy production. Should any difference be noted from one manufacturing batch to the next, results based on the product's use will have been confounded and therefore difficult to interpret.

Most companies at an early stage of the drug or biologic development process have not endured the degree of vetting and validation NWBO has for its DCVax product. The Company and its partner, Fraunhofer IZI out of Germany, received manufacturing authorization for NWBO's Phase III clinical trial during the summer of 2012 as the culmination of a 1-1/2 year process of technology transfer, regulatory applications, regulatory review, and various inspections.

Geographically, the approvals for German manufacturing have enabled DCVax-L to be produced in Germany and supplied across borders to the UK for the clinical trials in both locations. Getting this important cross-border arrangement in place is a key step towards building a Europe-wide distribution network for DCVax products. Although Europe has a common market, the manufacturing and supply of medicinal products across borders must meet detailed regulatory and institutional requirements in all countries involved. They have obtained such from the MHRA of the UK and from the PEI of Germany after years of work.

NWBO's Phase III clinical trial was also "adopted" as a national priority trial in the UK under the "adoption" program managed by the National Institute for Health Research (NIHR), which is part of the UK's National Health System. This "adoption" of the Company's Phase III trial constitutes a significant validation, and also carries with it resources and operational support for the trial sites.

The NIHR maintains a portfolio of clinical trials that have been "adopted" as high priorities for the UK. In order to be selected for the NIHR Portfolio, a proposed clinical trial must go through multiple layers of review and evaluation. The evaluation includes the potential significance of the new medical technology being tested, the quality of the trial design, the feasibility of the trial, and numerous other factors.

Trials that are selected ("adopted") for inclusion in the NIHR Portfolio are monitored closely by the NIHR, and the trial sites receive several types of financial and operational support. For example, the NIHR provides resources and funding for additional staff (e.g., nurses) at the trial sites to help accelerate the trial. The NIHR also oversees the performance of the sites, and imposes penalties on the sites for shortfalls, such as lags in enrollment.

In addition to all of the above, a separate manufacturing authorization for Hospital Exemption cases (Section 4b) was approved for DCVax-L by the scrupulous PEI of Germany as one major step in the process towards approving DCVax-L for Hospital Exemption status there (very much like FDA's Accelerated Approval, but without marketing ability). The Company had entered a waiting period of nearly two years while the PEI deliberated granting DCVax-L Hospital Exemption status (it received manufacturing authorization for this about halfway through -- a process that is much more involved than manufacturing approval for use in clinical trials).

The evaluation of NW Bio's application by the German regulatory authority included detailed scrutiny of all aspects of the DCVax-L technology, all DCVax-L clinical data to-date, all manufacturing processes, all product characteristics (including potency, composition, sterility, and other aspects), all frozen storage of DCVax-L and frozen shelf life, and all distribution and handling of the DCVax-L products.

It then was granted approval under the Hospital Exemption program for its lead product, DCVax-L, for use in all newly-diagnosed GBM, recurrent GBM, and all lesser gliomas (stages I-IV). This is outside of, and much superior to, approval for use in a clinical trial setting, as well as superior to compassionate use (exclusively company-funded).

It was further granted full reimbursement from the German sickness funds (health insurers) by the German reimbursement authority. This is a first-of-its-kind, landmark achievement of the Hospital Exemption approval of a product that exerts a pharmacological (i.e., drug-like) effect in the patient's body, and a very strong validation of the technology and manufacturing capabilities for DCVax-L.

As with FDA's Accelerated Approval, German Hospital Exemption (NYSE:HE) can be withdrawn, should the treatment eventually prove ineffective or prove to have non-isolated, adverse effects on patients treated. But given the above validations of the many peer-reviewed studies, this seems unlikely.

The PEI also could have granted HE to DCVax-L for a lesser term than 5 years, but instead chose to grant it for the full term. This was an individual decision from one regulatory body (NYSE:PEI). There are multiple regulatory bodies involved in an international trial such as this one. NWBO is seeking approval from FDA and EMA specifically. The latter will blanket all countries in the EU, including Germany and the UK, should the product be fully approved. However, Germany vetted DCVax-L thoroughly enough to grant it HE ahead of any FDA or EMA decision. Now all patients covered under the German sickness fund (German citizens) may receive this therapy at no cost to them.

It is estimated some 10,000 German citizens have GBM or lesser gliomas. Now that they may all receive DCVax-L, none of them will be enrolling in the clinical trials also being hosted in their country. This is apparently the reason for delay in enrolling there, as the PEI most likely saw this impasse. However, the trial will continue there, and will be open to residents of other countries who can enroll. Furthermore, anyone in the world with the means who is a non-citizen of Germany may now travel to Germany to receive DCVax-L at cost (currently $110,000 for one batch, which will produce on average 3-5 years of treatment per patient).

The Company should begin receiving reimbursement from patients who can afford the vaccine immediately. This was previously unavailable to the Company. In addition, once reimbursement negotiations are finalized (imminent), German citizens may also receive this therapy, and the Company reimbursement for it. Given the number of patients in Germany that may receive subsidized DCVax-L treatments (approx. 10,000), the Company may stand to receive anywhere from $150mm-$300mm in sales in Germany alone (allowing a range of $50,000-$100,000 per patient, with a conservative 30% penetration).

This provides perhaps the greatest distinction between DCVax-L and NWBO's competitors still in the developmental process. No other product or drug being developed to treat GBM currently has such extensive vetting, manufacturing capabilities, and reimbursement agreements in place, providing overwhelming validation of the technology and the Company's eventual ability to fully market DCVax.

Comparison With Competitors

To begin with, there really are none. Taken literally, there are no companies with therapies in advanced, placebo-controlled Ph III trials for newly-diagnosed GBM with intent to treat the entire GBM population. Thus, at the moment, there are no competitors on the horizon with effective therapies that could sideline DCVax-L or get to approval before it. DCVax-L has also been granted orphan drug status in the US and EU for a DC therapy treating this indication. These carry 7- and 10-year marketing exclusivity rights respectively for first-to-market products of such status, as well as other benefits. Should DCVax-L be approved, it will have a marketing lock in newly-diagnosed GBM for that time frame.

Its various patents also prevent other DC therapy companies from producing vaccines as effectively as its own.

All other companies utilizing their version of whole tumor lysate-loaded DC therapies to treat the entire GBM population are early in the clinical trial process, or are pursuing approval in indications other than newly-diagnosed GBM.

ImmunoCellular Therapeutics (NYSEMKT:IMUC), as mentioned previously, is one company that has a different type of DC vaccine that utilizes 6 synthetic antigens. It has recently reported on updated results of its Ph II randomized trial in newly-diagnosed GBM. ICT-107 has shown effectiveness in the HLA-A2 antigen expressive population (approximately 60% of all GBM patients). It has especially shown strong effect in those expressing this antigen when the MGMT promoter methylation subgroup is also apparent (44% of total GBM patients). This would account for some 20%-30% of the entire GBM population, a significant sub population (which it has stated it will be developing a Ph III trial to treat).

However, when comparing specific targeted approaches (Rindopepimut, or CDX-110, is another -- with an ITT population below 30%) already outlined in two of the studies above, whole tumor lysate-loaded DC vaccines, which express the full array of biomarkers, show stronger effect than highly targeted antigen expressive DC vaccines, such as IMUC's ICT-107. Thus, the results with DCVax-L should exceed those of that study.

Still, there is strong evidence ICT-107 could find its way to approval, should it repeat these results in a large Ph. III trial, but that would take quite a while. By that time, DCVax-L will have long completed its Ph. III trial, and possibly have been granted full approval. Should this occur, IMUC would be required to begin anew, proving effect over the new SOC, namely Temodar + DCVax-L in newly-diagnosed GBM. That would be a much greater task for it to show than simply effectiveness over Temodar (a similar fate may befall AV0113 and CDX-110, basically wasting all of the money and research they had put into proving an advantage over Temodar alone).

It would also lose its ability to take advantage of marketing exclusivity via orphan drug status, having been beat to the punch by NWBO and DCVax-L. NWBO is much further along.

Another mention, although not exactly a competitor, is Dendreon's Provenge. Already an approved therapy for prostate cancer, Provenge has had disappointing sales to-date. The reason for this lies in Provenge's complicated manufacturing and infusion processes, the very high cost of the vaccine with limited proven ability to extend OS, and fierce competition from the cheaper, far more aggressively marketed (by JNJ), comparably effective Zytiga. Just how can any company succeed in the face of such obstacles?

DCVax is, by comparison, much less expensive ($100,000 is broken up over 3-5 years), far easier to produce and preserve (8 days and cryogenically preserved until needed), and for an indication in which no major therapeutic advances have occurred in the last 30 years. The best that has happened in all of that time was Temodar, which extended patients OS from 12 months to 14.6 months. And there are no competing therapies on the horizon.

If DCVax-L can prove to extend OS by even 6 months, it would be a mega blockbuster drug. Even extending PFS by this amount (its primary endpoint in the trial), while showing a trend towards greater OS than control, would likewise make it a mega blockbuster. Then consider what would be thought of it if it could show (as it has in a number of smaller studies conducted in academia) some 2 years' OS over SOC. It would be an unprecedented accomplishment.

Risk/Reward Ratio

The only available therapy for newly-diagnosed GBM on top of resection and later radiation therapy, is the chemotherapy Temodar, approved in 1999 and then for GBM in 2005. An estimated 150,000-180,000 people will be newly diagnosed with GBM worldwide each year. With no significantly effective therapies available, the need is high for alternatives.

From a strictly marketing vantage point, should DCVax-L be approved for first-line therapy, it is expected, as Temodar has, that it will achieve deep market penetration because of the dire need. An estimate of over 80% is reasonable.

Should the vaccine be available for $75,000/patient, which produces 3-5 years on average of vaccine, and taking a conservative approach by considering developed nations' markets only (40% of total incidents), sales could reach $4.8B/year (beyond this, label extension may allow its use in multiple indications). A typical factoring of sales x 2 for market cap would yield $9.6B.

Fully diluted, that would equate to a share price of approximately $108/share, imparting a 1,080% profit on a $10 share price, or a 1,800% profit on a $6 share price (at the time of this writing, the stock sits around $6/share, with one-year price targets between $12-$15).

The risk side of this ratio would see the stock plummet from its current share price to below $2/share, thus imparting more than a 65% loss of investment (at the time of this writing).

Given the unknown outcome of their ongoing Ph III trial, the risk is quite high. Should DCVax-L fail to show effect of therapy, the stock will unequivocally fall. And despite the possible potential in DCVax-Direct, it would likely not rebound for a very long time -- if at all.

I consider the anecdotal evidence to be strong, however, with the upside clearly outweighing the downside. Investing in any high-risk scenario such as this should be done with much forethought and a limited amount of available funds.

Disclosure: I am long NWBO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.