Northwest Biotherapeutics Stock May Fade On Misleading Press Release

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On July 9, 2007, tiny Northwest Biotherapeutics (OTC:NWBO) issued a press release entitled “World’s First Therapeutic Vaccine for Brain Cancer Commercially Available to Patients in Switzerland.” The release stated that the company received an “authorization for use” from the Swiss authorities and that “DCVax-Brain is the first commercially available therapeutic vaccine for such cancers. The Company intends to begin making the product available to patients in Q3 2007.”

Investors and the press understood the approval to be a marketing approval, and shares more than doubled on enormous volume. Northwest’s President and CEO Dr. Alton Boynton fostered this misunderstanding, stating in the July 9 release:

We are delighted to be the first company to reach the market with a personalized therapeutic vaccine for brain cancers, which carry a very bleak prognosis for patients today. We look forward to providing DCVax-Brain at leading medical centers and hospitals in Switzerland.

A week later, the company issued another press release explaining that the authorization it received was really just for import/export purposes, and was conditional even for those limited purposes. The company now says that the Swiss government has not yet reviewed DCVax for neither safety nor efficacy. Northwest tried to blame the confusion on “certain media reports,” but any fair assessment has to fault the company’s misleading July 9 press release.

My take: DCVax may hold a lot of promise, but it will be years before it is truly commercialized in Switzerland or anywhere else. I think the stock is likely to fade back to $2, retracing 100% of the recent rally, as investors wait for more news. Still, I’m keeping the company on my watch list. This fall or winter, after the company does begin making the product available to patients, we will likely see another positive press release and another spike upwards.

NWBO.OB 1-year chart

Disclosure: No position.