KD, From their SEC statements below. Erik Ramos hire in 2014, spells that they are working on it. Erik ran pricing models in his former consulting life. Eric no doubt is running it for NW Bio. The company is very upfront in their SEC documents. Their press releases, however, are painted in the best glossy light. They do not need to present the negatives in their first press releases, and many of us immediately walked away in March 2014 under the impression that it would be a revenue stream in 3 - 6 months down the road, and continue thereafter. The negatives were it would take manpower, time and money to put these early access to medicine schemes in place. The hospitals need to be part of the trial first, and at the time, they were at various stages in the process on that. In addition, the Ph III amendment changes needed to be accepted at each German clinical site, and that was not complete until August (they couldn't tell us that part, as it was in negotiations, but they knew); And lastly, given they need to manufacture for the Ph III trial first, only light revenue could come from this until the trial ends. They later corrected at least our revenue interpretation, and at as at every conference, they stated revenue was secondary, practicing commercialization was primary. However, I believe it took a few months to let us know of the length negotiation process, and by October 2014 press release, it would be a patient by patient approval process (Actually I'm not sure if they told us the patient-by-patient insurance piece, but that is the case according to their SEC statements). To their defense, while I do believe this particular March press release was too glowing, I do see that when they announced HE they likely were under the interpretation that they would be able to raise more capital and execute these things quickly. As we all know the stock went to $10 to $3.79 in a short time, and financing slows down the speed of which they can execute many of their "wish list" items. And this HE is a very much a secondary item; they need to fund trials first, add clinical sites first. The UK EAMS is a wish list item too, but we know they are working on manufacturing in the UK. That is an 18 month process, according to other statements they've made about being able to use the sites for manufacturing. At the time when they did send out the initial March 2014 press release they knew all these things would take time; and at the time they released PIMs in Sept 2014, they also knew they needed to build up manufacturing. Take their positive press releases as positive, but continue to read the SEC statements, as those will add clarity on whether it is an immediate positive or a positive, some time down the road, finances permitting.
Employees and Contractors
As of February 28, 2015, we had 12 full-time, as well as manufacturing related employees in Germany. We believe our employee relations are positive.
In addition to our full-time employees, a substantial number of contractors provide various services for our corporate operations. We have contract management of our clinical trials and contract manufacturing of our products. In addition, since 2012 a third party firm has been performing the functions of a Chief Financial Officer, including financial systems and financial reporting. This third party firm specializes in providing such services to bio-pharma companies, both small and large, and the owners are highly experienced former partners of “Big Four” accounting firms.
This contract services approach has enabled us to have important financial functions performed by experienced specialists, and also to have large support teams for our work on an as-needed basis, without the ongoing expense. However, we plan to develop more internal systems and structures, and expand our internal personnel for these functions, over the coming year as our programs continue to grow and we move toward completion of certain clinical trials.
In the meantime, while the Phase III trial is moving toward completion, during 2015 we plan to be developing and growing our early access programs for providing DCVax-L to brain cancer patients, such as the Hospital Exemption program in Germany, as described below.
DCVax-L Early Access Programs
In March 2014, we received approval from the German regulatory authority of a “Hospital Exemption” for DCVax-L for glioma brain cancers under Section 4b of the German Drug Law. This approval for DCVax-L was the first of its kind in a number of key ways, although the law had been in place for several years. Under this Hospital Exemption, we may provide DCVax-L to patients for the treatment of any glioma brain cancers (both Glioblastoma multiforme, the most severe grade, and lower grade, less-malignant gliomas), and both newly diagnosed and recurrent stages of disease, outside of our Phase III clinical trial, and charge full price for the product. The patients may be from Germany or elsewhere. This approval has a term of five years, and can be re-applied for and re-issued at the end of that period.
During 2014, we undertook preparations for this Hospital Exemption early access program (for which the parties would not engage until we had received regulatory approval) including numerous contract negotiations with medical centers, separate arrangements for international patients at the medical centers, development of a registry and system for data collection, obtaining local licenses, development of patient contracts and consent and release forms, logistics arrangements, and other steps. During 2015, we plan to continue these program development activities, undertake outreach activities, and gradually grow the program.
Also in early 2014, we received a determination from the German central reimbursement authority that DCVax-L is eligible for reimbursement on an extraordinary basis, even though it is still in clinical trials. The reimbursement must be negotiated with the German Sickness Funds (health insurance companies).One aspect of the process involves negotiations with hospitals to seek inclusion in overall budgets which the hospitals negotiate with the Sickness Funds.Another aspect of the process involves negotiation of individual patient cases, one by one.
During 2014, we undertook considerable work on pricing models,and began the process of hospital budget discussions and case by case discussions. We expect to continue these processes in 2015. Although these are labor intensive and lengthy processes, we believe it is highly valuable to have an opportunity to undertake these processes now, while DCVax-L is still finishing its clinical trials and prior to commercialization, as normally these processes can only be begun after full product approval has been received and commercialization has begun.
In the U.K., we also undertook early access program activities in 2014. In April, 2014, the U.K. government launched a new program for early access to innovative new treatments for serious unmet medical needs: the Early Access to Medicines Scheme (EAMS). The EAMS involves a 2-step process. First is a scientific evaluation by the U.K. regulatory authority of the new treatment and whether it is likely to offer a major advantage over existing treatments for a serious disease with high unmet medical need. If the evaluation is positive, it results in a “PIM” (Promising Innovative Medicine) designation. Our DCVax-L for brain cancer went through this evaluation and, as we reported in September, 2014, DCVax-L became the first product to receive a PIM designation under the new EAMS program. The second (and final) stage of the EAMS involves a further Scientific Opinion and an evaluation of the manufacturing. Our activities for 2015 include pursuit of the second (and final) stage of EAMS. Recently, the first EAMS approval was granted to a big pharma’s checkpoint inhibitor drug, which is designed to “take the brakes off” a patient’s immune response to cancer. We consider this a helpful precedent.
As we have consistently said in our public presentations, we believe the most important value of early access programs such as the above lies in the regulatory validation involved, and the invaluable opportunity to practice for commercialization outside of clinical trials and before actual commercialization. The opportunity for some early revenues is also encouraging, but in our view is secondary.
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