Biotech Values

[DewDiligence]

Major shareholder seeks formal investigation of NWBO:

http://www.wsj.com/articles/major-shareholder-wants-inquiry-into-northwest-biotherapeutics-allegations-1448747062

A major shareholder is urging biotechnology firm Northwest Biotherapeutics Inc. to hold an inquiry into allegations about the governance of the company by Chairman and Chief Executive Linda Powers.

Neil Woodford, a U.K. fund manager well-known for investing in the biotech industry, has sent a letter to the board...to recommend it establish an independent special committee to investigate the claims. The letter was contained in a filing with the U.S. Securities and Exchange Commission.

He proposed the board appoint Elliott Leary, a former special agent of the Federal Bureau of Investigation… If appointed, Mr. Leary then would convene a special committee of nonexecutive directors to investigate the allegations, which…raise questions about…the company’s financial dealings with vehicles related to Ms. Powers.

…Phase Five Research, which carries out analysis of health-care and biotech companies, last month published a scathing report raising questions about Northwest’s technology in development and accusing Ms. Powers, of using the company “as her personal checking account to financially support her investment” in other private ventures. Phase Five claimed that since 2004 around $310 million in cash, shares, warrants, options and other benefits had been transferred from Northwest to the Toucan Group, an entity controlled by Ms. Powers and her husband.

…The activist move is an unusual one for Mr. Woodford, who typically adopts a passive stance. He made his first investment—$25 million—in the company last year. He has since invested an additional $70 million into the company across two subsequent fundraisings, and currently holds a 28% stake.

Of that total, he agreed to his most-recent investment, of $30 million, just days before Phase Five Research made its allegations. Mr. Woodford said in the letter that he “only became aware of these allegations after the completion of our recent investment” in the company.

Woodford's letter to NWBO's BoD can be found at the bottom of http://www.sec.gov/Archives/edgar/data/1072379/000121390015009081/sc13d1115a2woodford_north.htm .