For days like this when NWBO made my heart jump out of my chest and I am thankful for a tightly buttoned shirt, I recommend watching this relaxing youtube music: Raining Heart

What if Linda Powers was really the greatest strategist. The DCVAX-L silence, the 95% drop in stock price, and finally the volunteering to delist from the Nasdaq was all part of a master plan to deal a severing blow to a more powerful enemy that seemingly has unlimited resources and operates in the dark. It would have to be as horrible as the worst case scenario would be for a Long, ie to buy a stock at all-time-highs, based on unsustainable hype, mortgaging the house to quadruple down the investment, and to see it finally crash in a cloud of dust? Could it be creating a similar opposite situation for Naked Shorts, ie get them to do a major bear raid (naked short additional millions of shares), even when NWBO’s price is down 95% from its high, science is pointing towards success, risk is highest for Shorts, special agents from the Justice Dept are about to deliver a warrant, and then days later Linda releases Phase 3 results that strongly point to a safe and immune based complete cure to brain cancer?

Of course the Phase 3 results will be what they will be, but it would be great to dream of an epic short squeeze, one for the pocket book and the record books, that could tilt Earth on its axis by 5 degrees to the North.

Don't worry you're not alone. Even Dr Strange who went through rigorous meditation and training in the remote monasteries of Tibet would be twitching his nose, scratching his armpit, and twisting turning in bed if he were a long term investor too. And despite that he would remain an investor because he is trying to save lives on earth.

There is nothing more to say except happy thanksgiving and to wear an elastic waistband pair of pants tonight. Next week we anticipate again.

Hopeful, Congrats like so many others have expressed. Raising 4 children is a gift and a maze in and of itself. Best.

Mav, Thanks for sharing. Best wishes to your mom for a speedy recovery.

Hank, Coincidentally, no inconsistency there. Last year July 2015's $12/sh is about equal to today's $7/sh after including the upcoming dilution of 14M shrs.
- Fully diluted shares 6/30/15 was 107M. At $12/sh, that's ~$1.3B.
- After upcoming dilution, FD shrs to be ~180M. At $7/sh, that's ~$1.3B.

This is all down the road, but fortunately there are a number of business factors that NWBO has already significantly invested in and is now positioned to do very well in, that will impact the share price over and beyond.
- DCVAX L's extent of efficacy, report on side effects and quality of life, which will then determine whether investors view DCVAX as a drug or a potential blockbuster immunotherapy platform play.
- DCVAX Direct Phase 1 results and status on Phase 2 trials and Partnerships
- The extent of Institutional Investor demand that follows
- Short squeeze that could play out during the upcoming year, primed for releasing milestones and PR's
- Indications of drug pricing and manufacturing costs
- Sales forecasts, ramp up in each market, and how much of a sales force is needed

But until then, we have to wait for step 1 first (November 2016). Good luck to all longs.

Hopefulsurgonc,
This, of course, is subjective but as a long investor, i do have thoughts on the valuation.

I am factoring in the upcoming financing and dilution of shares. With the DCVAX-L trial closed, awaiting results in Q1 2017, and some hopeful indications or comments from management or the parallel information trial, I would give the company a $1.3B market cap or a $7/sh price. With an FDA approval, I see the mkt cap increasing immediately to $2.3B or a $13/sh price. If I factor in a interim short squeeze when all this happens, i would not be surprised to see those prices be 150% higher and stay there for awhile.

On each partnership with Big Pharma, I think it would be perceived to be worth $200M in additional mkt cap or ~$1/sh adder initially, on top of the DCVAX-L value. The reasoning here would be that the trial is a Phase 2, designed to allow for accelerated approval if results are strong.

This is all IMHO.

Flipper and Cherry, thanks for sharing your thoughts and modeling a scenario out to see. That is very hopeful.

I was guessing an outside of the box pick would be Bill Gates through a consortium of investors. My thinking is he has history investing in biotech and NWBO fits a "game changing" cure cancer, quality of life technology.

Probably not though, because if it were the financing size might be closer to $100M, or not yet.

I have no idea who the investor is.

Yes the price was $0.38/sh.

Some may have a bad taste with a 30% price discount, but consider what is normal or somewhat common in a biotech financing: 15% discount + 15% coverage of free warrants to the buyer. To me the decision by LP to trade a cash discount instead of giving warrant coverage, means she believes the shares will be worth much more than the incremental 15% discount (~$1M cash impact)prior to the next financing is to occur. I take that is an expression of confidence. How much more we shall see.

For shorts, I imagine their hope was a financing to a shareholder that sells in the marketplace and helps them cover because currently I don't see anyone will sell in great quantities. Given NWBO's fight against the wolf pack and the overtime howls of some posters here, I suspect that indeed did not happen. Instead, NWBO has $5M in cash, added a new friendly long term investor (tbd), and is about to release Phase 3 results that LP is confident will be positive, IMO.

100% agree.

Flipper. Thanks for the analysis and treasure trove summary of information. Very helpful.

...and "long" fake conversations with "shorts", if you know what I mean

Additional thoughts to what others have made, specifically on adding to an existing position of NWBO given the latest warrant exercise / issuance financing.

- on assessing dilution hit, compare actual % dilution to actual drop in price (eg <2% dilution vs ~20% price drop)
- on assessing if this purchase via warrant exercise validates a true value (generally this applies when there is a New investor (not warrant), large $ amount, sophisticated long term investor engaged in due diligence, eg Woodford)
- individual's own diversification and risk profile (each to their own)
- one's existing investment's loss position in NWBO (technically irrelevant, but is important for following ones own investment discipline)
- assessing price to market cap, i.e. valuation (part subjective based on interpretation of due diligence, and part objective based on due diligence, i.e. comparables of other bio techs awaiting phase 3 results.)
- on seeing the forest from the trees (Maverick has some good advice)

Actually more important than deciding whether or not to to buy more shares now (complex for each individual) is to not sell too early.

Thanks for continuing to share this valuable insight and information.

TC, That interestingly makes sense.

Sentiment here is what I've found from 6/30/16 10Q and subsequent events:

(Amounts in 1,000 - k)
Outstanding - 113,742
Options 1,551
Warrants 44,445
Convertible notes 1,764
Total diluted shares at 6/30/16 is 161,502K

7/4/16 raise add
Common 7,409
Warrants 3,700

8/23/16
Common (exercise warrant) 3,657
Less exercised warrants (3,657)
Add new warrants 3,657

Total diluted as of 8/23/16 is 176,269K or 176 million shares.

Thanks. What is really interesting is to know who bought those 4M shares. Obviously in this pendulum swing from $12 to <$1, that today's 7 penny swing is really nothing.

What's key is who sold (shorts?) and who bought (long term investors?). Not retail investors, hopefully that is obvious. Imagine if shorts fighting the price sold 4M shares to long term active investors (who are in it for 3-5 yrs or until the price hits $20). For $1.5M, some or several funds may have locked in a loss for shorts of $~$80M if news is positive?

I don't know, but even though the 7 cent drop is a pain, I don't really know who is shaking in their boots tonight.

That is very upsetting. Did you let NWBO know so this can be additional information, in case it can be added into their report or investigation?

Each cash raise is smaller and smaller. That indicates to me a bridge funding to either a partnership or anticipated phase 3 results.

My read: the second purpose of favorable terms in this financing is to secure long term investors that will support the company even after partnership or positive phase 3 results are announced. Given the example of false attacks on Dendreon even after FDA approval, LP knows that there is a long game, where having multiple active supporting financial investors is an important leg stepping up to being a multi billion $ company. There is continued risk and loss on the books for the investors. I think there is an understanding in the background for their role.

Unfortunately focusing on the low stock price and dilution is a diversion because that is already the current reality, already history. The science will come. Linda has influence only over future actions like strategic investors and everything else leading up to sales (operations, manufacturing, regulators, etc).

"Note: some shorts will wait and double down so beware."

Yes, unfortunately, and of course with naked shorts, they have unlimited access to funds.

However the degree to which this happens is managed by the type of investors. Shorts want "traders" because in case of good news, traders sell after their profit target (eg 10% or 100%), and shorts can cover at a forecastable amount. Linda Powers wants to find quality long term institutional investors that plan to hold for "years", seeing through the 3-5 year strategic plan of the company for example. That means unlimited downside potential. If LP succeeds with a couple more (count Woodford as one already), I would think shorts back off to a large degree after positive news is reported.

Hopefulsurgonc,
Watch The Big Short movie, particularly Michael Burry played by Christian Bale. Due diligence, perseverance, and waiting it out was the theme for him to do well for himself and his investors.

Secondary consolation, some of my shares I buy now, I plan to hold until $10-$20/sh, the rest long term. That means shorts don't have those shares to cover when news comes out. When the price was $6 or $7/ sh, my impact in this area was negligible. Now it will be more impactful, if NWBO trials go as I foresee. I think many longs buying now are "hardened" longs who see the "go big or go home" vision and will hold the large majority of their shares above $20/sh, my guess as that is my plan. Shorts will have a limited way to cover, imho.

Sentiment, Some days, with regards to information, it feels like surviving on just bread and water. Thanks for providing some butter.

Eagle, Your calculation is correct but it wasn't my example, see below. My example starts off with 4 investments 25% each, while yours starts off with 100% in Stock #1.

Dan_P, Sorry for the late reply. My only point about raising these 2 scenarios is to underline the asymmetric investment opportunity we have now with NWBO at $0.80/sh. I am the first to admit that while working I might daydream about putting money in Stock #1, having it double, moving it all to Stock #2, and having that double too. Then I imagine myself riding high, and if it happened a 3rd time, well I could just as well retire early. ?

I wanted to show here that even in this daydream scenario (doubling an investment and doubling it again, 4 times), the returns are still less than if NWBO’s stock price recovers from today’s woefully undervalued $0.80/sh to $12/sh, the price just a couple of weeks before the new patient screening hold took place.

Scenario A (doubling 4 times) provides a 7.5X return on investment or a 650% profit.
Scenario B (NWBO goes to $12/sh) provides a 15X return or a 1,400% profit.

The second question is related to risk. Obviously the probability of Scenario A is unrealistically small that one would not practically invest in this way.

Scenario B is the risk profile for DCVAX-L Phase 3 to succeed or fail, whether it be in a couple of days or in 9 months. Regardless the risk profile as determined by each investor based on their own due diligence should not have objectively changed because Phase 3 is blinded, and nobody knows the results.

What did change in the last 6 months is the reward side of the risk / reward profile because the stock price dropped from $12/sh to $0.8/sh, and that provides an asymmetric opportunity for a 15X return.

Also consider: DiMassi study 2/11/13: slide 10, Phase Transition Probabilities for Cancer Drugs by Cancer Type where the probability of moving from Phase 3 to NDA/BLA submission is 41.1%.
http://www.nationalacademies.org/hmd/~/media/3288F1F02DDB45D19A6A212B6AA3A78E.ashx

Although 41% is just a historical average probability of success and has no direct correlation, it is a strong data point.

With regards to the potential stock price if Phase 3 is ultimately successful, consider this:
Smith on Stocks 3/22/16:
"I think that if one year from now, top line results are not in but DCVax-L is judged to have a reasonable chance of success and the phase 2 trials with DCVax-L and DCVax Direct are ongoing, that the market capitalization could be $500 million to $1 billion. Remember that this broadly describes the current market view of Kite and Juno which have market capitalizations of $3.7 billion and $2.1 billion respectively. If DCVax-L does succeed in phase 3 and the phase 2 trials of DCVax-L and DCVax Direct are viewed optimistically, the market capitalization could be $5 billion."

Assuming Phase 3 succeeds, at a $5B market cap, 170M fully diluted shares (150M now + 20M to raise an additional $100M at $5/sh), i calculate NWBO’s price to be $29/sh.

I have 2 questions for the savvy investors out.

Question 1: Which scenario below gives you a higher return?

Scenario A: Invest $40, $10 on 4 different stocks. Each one will double in price. In the perfect world, your timing is perfect. The $10 investment in Stock #1 doubles in price first; you sell it and move 100% of the proceeds ($20) to Stock #2 where you already have a $10 stake in. Stock #2 price/sh then magically doubles in price; you sell that ($60) and invest 100% of the proceeds into Stock #3. Then Stock #3 magically doubles on queue, and you repeat the process, moving all the funds into Stock #4. Miraculously Stock #4 then goes on to double as well. In this scenario you hit the jackpot!

Scenario B: Invest $40 into NWBO today at $0.80/sh. Upon regulatory resolution of the current hold on recruitment for DCVAX-L, which can come any day now, NWBO's stock recovers from $0.80 to it's previous high of $12/sh price.

Question 2: Given what we know that we don't know, what is the relative investment risk / reward profile of each scenario?

Very nice!

And as you said in an earlier post, the only thing that has changed is the Price per share, meaning the potential upside is higher.

Doc, This is very insightful. This is yet another piece of the therapeutic picture that is forming.

Holding and buying NWBO, during this huge PPS drop in the midst of a coordinated short assault, reminds me of a psychology peer pressure study where they found people would conform to obvious wrong answers if many "participants" answered first with wrong answers (actually working for the study organizers).

I say this situation is a test of character and or of strengthening it. I will stay true to my due diligence and my belief in the science, helping patients, visual picture coming together of a new paradigm in cancer treatment, and asymmetric investment opportunity. Now I add one more, play my part to slow down the illegal naked shorts.

There are too many positives, too much investment in manufacturing/multi-continent/international validation, too much investment from Woodford, too much encouraging DCVAX L data and Direct data, and too low a price for me to be passive. Good luck to longs.

The partial clinical hold on screening new patients has been going on long enough that we would have to be very close to resolving this issue. Since NWBO is “in ongoing dialog with regulators, and providing further information. The Company hopes that this issue will be resolved soon.” (5/2/16 press release), they must have a good idea of timing and of what the FDA’s solution to this is.

Therefore NWBO coming up with the 21-day extension on the exercise period for the $3 warrants (March financing), a 200%+ increase in stock price, is an indicator of a big positive surprise forthcoming.

Sentiment, Thanks so much. I have been adding shares these last couple of weeks. The price is at a level that makes this truly an asymmetric investment opportunity.

Flipper - Thank you very much for your analyses.

For long-term investors, I do not recommend changing your investment discipline or strategy.

Obviously calls to make your money back by selling shares high and buying back lower are tempting but only because it plays on the "current" emotional vulnerability of investors after seeing the PPS drop from $12 to $2/share. The unintended consequence is that a long-term investor will turn into a trader. Don't fall for that. Rise to the occasion. We are rounding a corner.

Thanks for organizing. Looking forward to it.

Thanks Sentiment. This line stands out:

Thanks for the clarification.

The investor village link says 97% institutional ownership as of Oct 31, 2015. Nasdaq shows 37% institutional ownership. Maybe the difference is the classification of insiders (employees, LP, Cognate). That is an extremely high % and only positive.

My sense for the Woodford board member and investigation is not so much for dealing with naked shorts, as they are like cockroaches and have tremendous staying power. I think they are preparing for eventual DCVAX-L approval and the next logical step of raising $200M or $300M from future institutional investors. You need an "audit" for a "check the box", so you can attract the best institutional investors at the best price per share.

How I see things: Once NWBO reports on the DCVAX-L Phase 3 trial information that was submitted for regulatory review”, this starts a chain reaction regardless of whether the results of the report are breakthrough AA approval or a simple “continue”.
• It allows for disclosure of the Interim Analyses and that the DMC recommendation to the FDA was likely for a halt due to efficacy (ie original reason for submission of data to regulatory agencies)
• Reporting Interim analyses results give the UK Early Access to Medicines Scheme (EAMS) the information they need to give NWBO approval for step 2, which allows DCVAX-L to be sold in UK even though the Phase 3 trial is not finished yet.
• Having Interim analysis, level of efficacy is important for finally setting the price for the DCVAX-L treatment in German and UK, higher relative efficacy vs existing treatment means higher price. (Possibly a formula is agreed on already, price calculation depends on # of months DCVAX-L is better than Temodar SOC)
• Setting price would then enable NWBO to calculate and collect on German Hospital Exemption treatments (sales) already provided for and would allow reporting and forecasting.
• Potential Big Pharma partner for Direct Phase 2 trial may be waiting for DCVAX-L news before signing, who knows. Regardless the AACR abstract was September 16th, reporting great news. Timing is ripe.
• Timing on release of PR's on Phase 2 trials coming up may be strategically optimal, ie approval of trial protocols, # to trials, and which indications/diseases to treat, and timeframe.
• We get to see the army behind Woodford’s $30M investment October 21st and Ondra Partners. They probably brought along a small army of (EU) analysts and investors that are waiting before pulling the trigger. ($150M shelf set up to sell to friendly investors, who have an option for quick profits given the huge short position or squeeze that would occur.)

In the meantime, we’ve been getting info about building up manufacturing, commercialization activities (setting up new trial clinics on the doctor / hospital side and Cognate, Fraunhofer, and Kings College on the mfg capacity side.) This leads to the ability to forecast the timing and amount of achieving peak sales, something buy side analyst can sink their teeth into.

Thanks Flipper. How much clearer do the road signs have to be.