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How would NWBO contribute to this partnership?
Is the clinical trial between UCLA and Merck/Bristol Myers? Or is it between NWBO and Merck?
I believe what Momentum was trying to say is that the current partial clinical hold is not due to safety reasons.
If it as, the Expanded Access trial would've also been stopped.
I never wrote that, so please dont twist my words. I specifically said SOX compliance is wasteful spending. Hiring a CFO is a completely separate topic. I am neutral on that as there both pros and cons to it and I umderstand both sides of the argument.
Though Flipper has already responded, I will chime in as well.
Since 2010, Dodd-Frank Law permanently exempts "Smaller Reporting Company" from having to adhere to SOX 404 compliance.
Link from a Big Law Firm:
http://www.friedfrank.com/siteFiles/Publications/58BFC97CC1C1DA5E2384832B726EBE65.pdf
Definition of a "Smaller Reporting Company" from Wikipedia:
https://en.wikipedia.org/wiki/Smaller_reporting_company
Thus since 2010, NWBO and thousands of other companies did not need to incur the extra cost of being SOX Compliant. If NWBO were SOX Compliant, I would seriously question management's use of funds over the past 5 years as SOX Compliance is not cheap.
Yes, absolutely. To build out a whole manufacturing line for volume commercial production, pass FDA cGMP audits, and set up the necessary partnerships with hospitals and medical suppliers only to have the drug not get approved? That is TREMENDOUS risk for the business with very limited upside. This doesn't include the opportunity cost of using that space for developing generics, approved therapies, or even loaning it out to Big Pharma for cash.
To make sure everyone understands, I am only referring to the commercial build out of the production line. Clinical trial manufacturing is small, can be performed on a one-off basis, and thus completely viable for any contract manufacturer to take on. That is not what is being argued here.
Only the full commercial build out required by the FDA for final Cell Therapy Approval.
To clarify a few points below on why I believe ARGS and NWBO are not comparable.
With regards to factual items about ARGS:
1. ARGS only recently began construction on their new manufacturing facility for commercial production. Thus, it is impossible for them to begin scaling their current production. This new manufacturing facility is designed to replace whatever facility they are currently using. Thus, it is logical to conclude that ARGS's current facilities do not have the capabilities to scale or expand production and is at capacity. Hence, ARGS's need to purchase additional land for a brand new manufacturing facility. (Source: ARGS Most Recent 10-K, pg. 21).
With regards to NWBO and Cognate, expansion of manufacturing capabilities is taking place at the Memphis facility. Thus, the Memphis facility definitely has the potential of producing initial commercial volumes of the DCVax products. This facility is owned, managed, and operated by Cognate.
As ARGS has just initiated construction of their new manufacturing facility, I cannot see how ARGS can be further along than NWBO.
Not comparable.
2. ARGS's does not contract out manufacturing services. ARGS's contracts out the development of automated production process to 2 independent firms, Invetech and Saint-Gobain. Invetech is responsible for creating the automated production process and equipment for creating ARGS's product. Saint-Gobain is responsible for creating all of the disposables that will be utilized by the process to produce cell therapies. That is completely different from contracting out manufacturing services. ARGS, not the 2 partners, will be responsible for setup, execution, maintenance, and future development of their manufacturing processes. (Source: ARGS Most Recent 10-K, pg. 12)
NWBO contracts out manufacturing services to Cognate. Cognate is responsible for not only developing the automated production process, but also its setup, execution, maintenance, and future development.
In my opinion, this is extremely beneficial to NWBO as Cognate will continue to invest and improve the manufacturing process. This is possible as Cognate has a separate cash account from NWBO and different business objectives. Hence why as shareholders we continue to hear improvements in the overall production and delivery process. ARGS does not have this luxury. ARGS will be constrained by their cash resources and once the production system is sufficient to pass FDA guidelines. I believe additional investments will cease until ARGS sales have increased to a point it can sustain operations.
Thus not comparable between NWBO and ARGS.
For your other comments, I've stated in my previous post where I've listed out all of my points that the only truly unproven portion is Cognate's ability to produce commercial volumes. This is something NWBO has stated Cognate and them are working towards and preparing for. In one of their past prospectus, NWBO has stated that Cognate's Memphis facility has the space to increase capacity to service 5,000 patients annually. This capacity increase will occur on an as needed basis. DNDN launched their Provenge product with an initial manufacturing capacity of 2,000 patients annually. This is the link to the filing where these numbers are stated: http://www.sec.gov/Archives/edgar/data/1072379/000114420412067286/v329695_424b4.htm
Cognate has the space to expand (primarily clean room), ARGS clearly did not. The only thing that has not been proven for Cognate and NWBO is that all of the equipment needed to expand capacity to service at least 2,000 patients annually is in place.
For ARGS and other BioTech companies, I find it difficult to believe that outside cell therapy contract manufacturers would shoulder so much business risk for the opportunity to produce treatments that have yet to record sales. It makes no sense to build out a large production line for a product that has not yet been approved for the marketplace. Thus why all of these BioTech companies are forced to build their own manufacturing facilities and contract out the development of the equipment and processes. Hence why I believe NWBO's situation is so unique and such a large competitive advantage.
Yes, those are all great points about what Cognate has done for NWBO. Which points out something else. ARGS must pay in cash to their partner, even though payments can be deferred until the completion of the trial. NWBO was VERY fortunate to have Cognate as a partner when cash was short, but shares were plentiful.
I am very supportive of this arrangement, as it can clearly be seen.
To clarify, I am not providing an opinion on ARGS. I do not know the company well enough to even begin to comment on what my analysis means for them. This was simply to highlight that ARGS and NWBO are very different and cannot be compared, even though Austin stated they are a great comparison.
In addition, it also means that it is futile to compare the "Accumulated Deficit" number on the balance sheet between NWBO and ARGS. That difference can easily be explained away with the fact that NWBO has a full-fledged production, international, cGMP facility that can manufacture NWBO's treatments in commercial volumes. ARGS is just STARTING to build theirs out.
I don’t know, but here is a link providing all the profile of the Cognate Leadership team: http://www.cognatebioservices.com/leadership. I cannot judge if these qualifications are correct.
In addition, regarding my other points about Cognate, here is what I do know and that Cognate has proven:
1. Cognate’s facilities adhere to cGMP standards. Yes, this is expected, but it still costs a lot of money, expertise, and on-going maintenance. ARGS is still under construction.
2. Cognate has been working with European partners regarding negotiations with Unions, transferring key process knowledge, and ensuring regulations are adhered to from a production standpoint.
3. Cognate has been working with all of the existing clinical trial sites and has established new methods of transporting cell therapies. In addition, Cognate continues to come up with new solutions that decrease the variable cost for developing therapies (i.e. Batch Processing). ARGS has existing process in place. But those existing process will be non-existent in the coming years once their new facility is completed. ARGS will have to re-invest to build out a brand new supply chain with new partners. That costs a lot of upfront cash … again.
4. Cognate has maintained the facility well and continues to pass FDA audits (else, not sure how they maintain their cGMP status).
Here is the only thing that still has not been proven:
1. Cognate has successfully scaled out the production environment to support a commercial launch of DCVax-L. This will not be fully proven until DCVax-L gets to the market (if it ever does).
Of all the points I’ve highlighted that differentiates Cognate and ARGS, there are 4 where it is proven and only 1 that is unproven. ARGS will get to where Cognate is, but who knows how long? At least we have something proven.
I am not sure if ARGS is comparable to NWBO in terms of looking at and comparing 3rd party services.
1. ARGS's 3rd party partner, Invetech is only responsible for developing automated production systems. NWBO's 3rd party partner, Cognate does far more than just develop automated production systems. They also manage a number of other key back office functions.
2. ARGS appears to be responsible for scaling out the automated production systems so it can produce enough volume in the event that the FDA gives their product marketing authorization. Cognate manages that for NWBO.
3. ARGS appears to be responsible for ensuring their brand new manufacturing facility that is currently being constructed on their 11 acre property in North Carolina meets the CGMP standards set forth by the FDA. Cognate manages that for NWBO.
4. ARGS appears to be responsible for managing the procurement of "raw materials" (i.e. Cells, Tissue Samples, etc.), build out of the logistics network, and transportation of therapies. As Cognate is responsible for their facilities, I would not be surprised if this is also managed by them for NWBO.
5. ARGS appears to be responsible for understanding different manufacturing rules and regulations in Europe, and for transferring key process knowledge to international partners. Cognate manages that for NWBO.
6. ARGS will be responsible for managing and maintaining the entire production system once it has been built and implemented in their new facility. Cognate does that for NWBO.
So in total, ARGS has paid Invetech $15.5 MM in the past 9 months for developing an automated production system. At the moment, I am not sure where ARGS treatments are being manufactured but it is clear their current solution is not scalable. NWBO has paid Cognate $28.4 MM in the past 9 months for scaling the existing platform and all of the other items above.
Thus, I don’t think NWBO is comparable to ARGS. Therefore, the question becomes, is it worth it for NWBO to pay out an additional $14 MM for points #2 to 6? I don’t know, but I believe so.
Of course, this assumes there are other contract manufacturers out there willing to take on ALL OF THESE ADDITIONAL BUSINESS RISKS for a bio-tech company with no guaranteed current/future sales that Cognate has shouldered on behalf of NWBO.
Thanks for the response Pyrr. The science part is my Achilles heel, just don't have the time to study as in-depth.
Thanks looking out for my portfolio. I've explained my strategy for investing in NWBO previously somewhere in past posts.
I've invested a somewhat sizable sum into long term options, thus if NWBO does shoot thru the heavens, I can reap even larger rewards. To hedge the potential loss, I've screened for high yielding fixed equities. I've almost made back my entire NWBO investment thru dividends payouts and will continue to hold these equities until my NWBO trade is complete.
For now, I plan on holding till the conclusion of the trial. Your insights worry me. But given how much is still unknown to the medical community, it is might be possible NWBO might be onto something no one else is aware. Of course, that probability decreases thru the continuous research of everyone, but I still believe there is too much for everyone too learn.
Plus the total principle that is at play has been more or less been earned back, so it is not like I am terribly worried. Thanks for checking. Unfortunately, I might still be throwing questions at you. Thanks for all of the help.
Hey Pyrr, questions:
1. Are the DCs for DCVax-L not already matured when injected into the body? I thought only DCVax-D is partially matured upon injection.
2. Is there a difference between partial maturity and immaturity? Previous communications from the company indicate there is a substantial difference. Have you found research to suggest otherwise?
3. The immaturity referenced in the case studies that you've shared, are those immature DCs or already on their pathway to maturation?
4. Is the type of cancer important here? GBM vs Melanoma?
5. Is the size of the tumor an important factor here? The studies you've shared are for Melanoma, a type of cancer that can grow to be of a substantial size. For GBM, since space is limited, it cannot grow beyond a certain size. Is it logical to correlate the size of the tumor with the effectiveness of the immunosuppressive environment? (Larger tumor = stronger immunosuppressive environment.)
6. In addition, if the size of the tumor is minimal, would the number of DCs needed to migrate to the lymph node be smaller for there to be a clinical benefit?
Thanks in advance for the research.
Thanks for the analysis on cost.
Unfortunately, from my understanding, manufactured personalized cancer treatments cannot be compared to those costs listed on the report. A number of recent articles have appeared that showed manufacturing costs for JUNO and KITE therapies will range between $50K to $150K per patient alone. That doesn't even include all of the other overhead costs such as recruiting, screening, enrollment, administrative, and other costs.
I don't believe the $42K average for a Phase III trial or the $65K for an Oncology Phase III trial in the report is comparable to the cost of a Phase III personalized therapy that requires manufacturing. NWBO is a 1st mover in this area, thus have very little comparables.
Let me know if I am missing something.
Thanks Pyrr, this was extremely helpful.
I knew of a few other DC trials that were ongoing, but was not aware of there were this many.
To summarize your current investment thesis:
1. You believe that DCs is a viable science and will eventually generate some kind of immunotherapy agent that will help fight cancer.
2. BUT the activation and storage methods of the DCs immunotherapy are the defining critical factors to its' effectiveness.
3. Due to the extremely long and lengthy trial of DCVax-L, the DC activation methods are "Out of Date" and new storage methods need to be developed.
I know there is a lot more detail, but that would be the broad executive summary.
Hi Pyrr, what other companies that produce DC Vaccines have Big Pharmas partnered with? Do you have a list of those companies? I am interested in hearing about other BioTechs that have thrown in their money on DC Vaccine technologies.
Is it possible Woodford requested NWBO hire Ondra Partners as part of the deal for $30 MM of investment?
Another of Woodford's investments in Theravance, Ondra Partners was also part of the deal.
http://investor.theravance.com/releasedetail.cfm?releaseid=938315
The stories and notes from the articles are very impressive regarding Ondra Partners. I am debating about the need for these extra funds. What do you think extra funds would be used for?
Linda was making these statements to Doctors and other health professionals AND/OR investors at established conferences and events. These comments were made in professional settings where the audience in attendance are professionals who are expected to have the training and education to determine for themselves if her statements are worth any consideration.
You are sharing UNPROFESSIONAL opinions directly with patients. If you are a Medical Professional with a solid pedigree I will withdraw my views, but till that is proven, sharing your analysis with patients is a Load of _____. Do not even try to compare yourself with Linda, she is way above you here.
I’ve never attacked you. I’ve read your analysis along with others who have shared their views on this forum and came to my own conclusions. But moving to “informing” Patients … you do not have the experience, pedigree, or knowledge. If you were to share all of your analysis with Doctors or other Medical Professionals, that is fine. It is their job anyway to shift through information like this and make informed decisions about their patients. But directly to Patients, that is very low, very unprofessional, and show cases, for the first time IMO (regardless of what other posters think) your arrogance.
Pyrr, i do not think it is right for you to try to convince patients to not use DCVax-L because your hypothesis is that the product is useless. Leave it to the doctors. That is unless you are qualifed to handle not only diagnosing cancer and determining treatnents but also managing the emotional stress and burdens of a family who is worried abiut the patient in question. It is easy to provide advice when you have no stake in the game.
It is fine to argue and debate on an investment board, but with patients ... Not so much.
Plus, you have switched your poimt of view because you believe you got a better understanding about the product and process. What is to say that perspective will not change again? Possibly 6 months from now, you stumbled on some new research papers that provide evidence that changes your viewpoint again. Nothing wrong with that, it happens.
I don't agree that RK decided to post her analysis on a day Bio's get hammered.
Guys, the post came online 10 mins after market opened. If RK was that good at timing the market, she should be buying PUT options instead of doing all this due diligence. She shouldn't even bother reading SEC reports.
This was just a coincidence, her analysis was posted on a day when the market decided to tank.
I would attribute the drop to the overall market and the BioTech index.
RK provided FANTASTIC analysis, but to attribute the drop to a single message board post is a bit ridiculous.
Segregation of Duties issues will continue to exists regardless if a CFO hired tomorrow or next year. All of the language in the 10-K about potentially material weakness is added more to protect firms against investor lawsuits than anything else. To believe that a CFO would add more "credibility" to the numbers is pretty ridiculous.
NWBO does not have the cash or sales to support the proper organization that can appropriately comply to all SOX regulations. That is a fact.
Personally, right now, I am not sure how valuable a CFO would be to the organization given the amount of work available and need to minimize cash burn.
Thus, ultimately it comes down to a level of comfort for each individual investor regarding a CFO. If you feel:
1. Strongly that every company needs a CFO, then the appropriate course of action is to consider shorting NWBO.
2. It would be nice to have a CFO, but not necessary, then the appropriate course of action is to wait for NWBO to hire a CFO and then buy the shares.
3. Indifferent about a CFO right now (but might need one later on in the future), then hold your position or buy more shares.
If NWBO's price does crash because of the CFO issue, then it will be experience that we can all learn from and adjust our risk/reward profile as necessary.
Absolutely, and especially considering that NWBO has never done a "public" secondary thru banks.
NWBO's secondaries over the past year have always been anchored by a SINGLE institutional buyer, whether it be Woodford or another undisclosed fund.
Linda's work to get NWBO in so many different government programs have significantly altered the Risk / Reward ratio for a standard BioTech company.
I think it is inaccurate to say that Dr. Bosch "downplays" a process.
Dr. Bosch stands fimrly behind his patented process. He "downplays" one potential value of a key input that resulted in DC Method A.
It does not mean the process does not work. It just means that specific input variable does not work well in this process.
So, NWBO uses pretty much the same language to introduce all of their patents, thus I think it is difficult to pinpoint exactly which Patent "removes" the IL-4 effect you were describing.
http://www.sec.gov/Archives/edgar/data/1072379/000114420414061989/filename1.htm
In the above link, it clearly states that the FDA has already approved and NWBO is already using these techniques in their current trials. Also, with regards to maturation of Dendritic Cells, some of those were issued back in 2012 if not earlier.
These 2 links have almost the exact same wording ...
http://www.nwbio.com/nw-bios-patent-portfolio-further-expanded-with-manufacturing-automation-patent/
http://www.nwbio.com/nw-bio-receives-u-s-patent-on-broad-processes-for-producing-more-potent-dendritic-cells/
To me it seems like the overall manufacturing process is soo different from what is currently industry standard (from maturation, to biochemicals, to filtration, etc.). Thus, it is not fair to compare anything that NWBO does against the other studies. It is not just 1 thing that is different, it is many.
Pyrr,
My understanding was that NWBO's manufacturing process was significantly different from current industry standards.
Current industry standards rely on a biochemical factor known as IL-4 to prevent Dendritic Cells from maturing into undesirable cell types. This maturation "pivot" causes the Dendritic Cell confused state.
NWBO has developed and recently obtained the patent for a new DC manufacturing that significantly decreases the confused state.
http://www.prnewswire.com/news-releases/nw-bio-receives-us-patent-on-broad-processes-for-producing-more-potent-dendritic-cells-198760831.html
Other studies that use DC vaccines should be plagued by the above issues, but I am not sure if those same issues apply to NWBO's DCVax programs. Due to the differences in manufacturing processes, it is not possible to compare NWBO's DC Vaccine with competitor DC Vaccines.
Let me know if I understood the above patent incorrectly.
Thanks
Guys, let's not bother these folks. Last thing we need is to introduce unnecessary responsibilities for MDA employees because of one person's post.
Yes it is part of the Due Diligence process, but honestly, does anyone believe these folks have the Full & Complete picture of the trial and respective results.
FYI, Babita is the primary contact for the DCVax-Direct trial @ MD Anderson. There are a number of emails from patients that show they've spoken to Babita regarding access to trial.
I agree on the $9.40.
The other one to watch for is the 50-Day Moving Average. It has bounced and rallied significantly over the past year every time it hits the 50 MA.
I think that is the strongest support. If it breaks the 50 MA, convincingly, I will sell my holdings and buy back in around the bottom.
Personally, I don't want NWBO to detach from Cognate. We've paid too much for all of that technology, manufacturing improvements, and scale to let them become a standalone company.
Right now, financially it makes a bundle of sense.
- No D&A
- No additional labor / regulations / taxes / complexity / etc. One fee covers everything. NWBO focuses on science, trials, etc.
Later on, IF NWBO is successful, I want them to buy out Cognate.
- It will bring all of the technology in house
- AND it will transfer owernship of all current outstanding shares back to NWBO. I am not an accountant, but I believe that can be considered as an indirect buyback and reduce our overall outstanding shares.
I don't know man ...
I think you should consider selling all of your NWBO shares . Then it will skyrocket for the rest of us. It would be a huge contribution to the overall community here and everyone would love you.
Just saying
I've read the post and think it is a well-written analysis of the poster's rationale and logical thought process. His/her opinions were derived from his/her assumptions and research. For folks who have not read it, I would recommend reading it to understand a potential perspective of an investor who ultimately does not believe NWBO will be profitable enough to support a significantly higher PPS.
He/she not only considers the science, but also the future market potential and why it might not work.
With the above stated, I will also state that most of what was written were his/her own personal opinions, well-formed, researched, rational, but still opinions with plenty of built in assumptions. Of course, as with all opinions, there are plenty of holes in the poster’s arguments.
I will provide my own thoughts around some of the bigger issues this poster has shared:
1. Patents:
“Yes, the process of injecting patients is probably not patentable.” I think using this as an argument is a bit of a stretch. It is like saying "taking a pill is not a patentable process". I think it is quite obvious that “filling a syringe with a liquid treatment and injecting it into a patient” is not a new process. NWBO has a number of patents surrounding the process of maturation, induction, and preservation of DC cells. Those are the key processes and technology that make DCVax product different. To highlight the injection process as not “patentable” the poster is trying to point out that it is the most “critical” part of the product and it’s application. CLEARLY that is not the case, so this argument is moot. In addition, I believe the simplistic application nature is a COMPETITIVE ADVANTAGE vs other treatments. There is no need for expensive equipment, complex training, or any other substantial investments that standard hospital will need to make. The only exception might be additional investment for machines that performs specific blood draws, but outside of that, the product can EASILY be rolled out to a number of medical institutions with ease.
2. Cognate:
The poster assumes that Cognate can continue to stay as a viable entity if NWBO disappear. Considering how many shares of NWBO Cognate owns, I believe Cognate will go bankrupt instantly if NWBO goes bankrupt. If proper accounting rules are followed, these shares will be recorded as assets on the balance sheet. If NWBO goes bankrupt, the asset portion of the balance sheet + remaining accounts receivables will take such a huge blow Cognate will likely be unable to recover from. This is a symbiotic relationship where both parties benefit (better balance sheets) and both parties suffer if the other disappears. To believe otherwise indicates that this poster does not understand how balance sheets are constructed and how equity stakes in other companies are presented on financial statements. The only other possible explanation is that Cognate can take a $100+ MM asset write down and still be viable because they have very little to no debt. I find that unlikely as NWBO definitely does not pay enough in cash in to finance the recent expansions, European manufacturing consulting fees, and capital equipment purchases.
3. Manufacturing and Operations
The poster assumes DNDN and NWBO will have similar operating structures because their end product is built off of Dendritic Cells. This is the farthest thing from the truth and there are a number of articles that indicate DNDN and NWBO are vastly different companies. I don’t plan on going into too much detail here, but I believe everyone knows.
Anyway, just some food for thought for you guys. I believe it is a good idea to read someone else’s thoughts just to understand the different perspectives that drive investment decisions in a particular stock. Clearly, I don’t agree with most of the things written, but it does not mean I should just ignore it.
It broke thru an extremely important resistance line with strong price action and solid volume. I can't see why this momentum will not continue taking it upwards for a few more % points.
From a technical perspective, the $9 range is now the new support.
Sorry, didn't see this post till after I posted my response to your previous post.
Just one quick clarification, I think you meant to say $6 of intrinsic value vs $8. Guess someone REALLY wanted those PUTS.
My thoughts below:
This is a VERY strange straddle and hard to interpret.
The "Ask" bid for all of the July Calls are priced at $0.25 from the $11 strike and above. Thus, it makes almost no sense to me to purchase ANY STRIKE above $11 as they all cost relatively the same. Considering there is obviously a higher probability of hitting $11 then $15 and the cost to acquire both are equal, this action confuses me. The correct straddle purchase on the Call Side should've been at the $11 strike.
In case anyone needs some more proof regarding point #3 ... it happens. Might not happen on EVERY security ... but it does happen.
http://www.sec.gov/litigation/complaints/2015/comp-pr2015-107.pdf
"This case involves a serial insider trading scheme perpetrated by a group of stock traders that generated over $4.4 million in profits. The primary component of their scheme was the systematic misappropriation of material non-public information from investment banks confidentially marketing secondary stock offerings by publicly traded issuers. The individuals who participated in this aspect of the scheme – Fishoff, Petrello, Chernin and Costantin – together made over $3.2 million by obtaining advance knowledge of the offerings from the invgestment banks and then, after tipping other members of the group, selling short the issuers’ stock before the offerings were publicly announced. The confidential offering information obtained by these defendants was material because the offering shares were sold by the issuers at
a discount to the market price and diluted the holdings of existing shareholders. As a result, the issuers’ stock prices dropped substantially after the offerings were announced, thus enabling the
defendants who shorted the stocks to cover their short sales at a hefty profit."
Of course these guys got caught. Now of course, this doesn't mean this type of stuff happens all the time NOR does every Hedge Fund participate ...
Nah AF is done with NWBO.
In my opinion, it was clear AF was trying to bankrupt NWBO so that one or a few hedge funds would profit handsomely. The clues have slowly been popping up:
1. NWBO's cash balance in past filings have always been EXTREMELY low, thus it was always a few months away from Bankruptcy. At one point it only had $1 MM in cash. That was 1 month of cash for their operations. They were definitely not enrolling patients or opening new sites during that time. Not sure if you guys were aware of that. Linda has TRULY been amazing at finding Woodford and funding. Under-appreciated.
2. Woodford's investment in NWBO has brought in a solid institutional investor that makes the probability of future bankruptcy less likely.
3. NWBO skipping Investment Banks for the most recent $40 MM investment implies that Hedge Funds do not have a credible source for when the next dilution might occur (That information is definitely shared with funds if only just to find buyers for the new shares being issued. Where the information goes afterwards is whoever's guess.)
4. There was a large one time warrant conversion a year prior, well before the warrants expiration, in either the most recent filing or the filing prior indicating that someone/some fund needed shares. Else why exercise so early? (if someone has another hypothesis here, would love to hear it). This warrant exercise was material enough to have it's very own filing for the SEC. That is how significant it was. Typically, warrant exercises are just a line item on the Cash Flow statement.
If anyone else wants to add more points to the above, please feel free.
Now that NWBO is backed an large investor, stronger balance sheet, clinical trials progressing ahead, AND banks have no idea when the next dilution is happening, shorting now is pointless UNLESS investors absolutely believes the science is a load of bull.
TZOR gave some great insight into some of the more advanced options strategies! I think it is worth reading slowly, ESPECIALLY his post about the different variables that are considered when pricing options.
Personally after a number of years investing using options (having lost 100% and pocketed 500%) is to use it to expand portfolio while minimizing risk.
I recall writing this before, but to clarify for folks who are interested of merging options trading into portfolio management for a Retail Investor.
Most of the time now, I use options to increase a position in an investment WITHOUT increase more capital. At the moment, NWBO Jan 2017 $10 Strike options are around $2.15.
Instead of committing another $10,000 to buy a little over 1100 shares, I would increase my position in NWBO by buying the $10 strike in Jan 2017 for a total of $2,150 for the option to purchase 1,000 shares in the future.
Why is this important, in case between now and Jan 2017, something extremely negative occurs like the failure of the DCVax-L trial? Well in the scenario above, I would lose only $2,150 instead of $5,000 (assuming full $10,000 investment and PPS drops 50%). If something extremely positive happens (L is halted and PPS increases by 100%), then I still have the option to purchase 1,000 shares at $10 a pop even shares are now $20.
What makes this strategy special is that $8,000 is held in cash (or dividend generating stock) and never at risk WHILE I still maintain the same exposure to NWBO that I originally wanted to purchase.
The downside is that if by Jan 2017, NWBO has not moved from it's $9.00 PPS then I lose $2,150 while if I purchased the stock I would've lost nothing.
For folks who want to consider another way to play options while still trying to adhere to their risk preferences, keep portfolio diversify, and capture increased upside. Over the years, I've moved away from making large options bets (when available cash was in 4 digits) to ensuring my capital was optimally allocated according to the gains I want to see with the risks I am willing to take.
I've tried several of the more advance options strategies, but I find it too time consuming to not only analyze the stock but also the options, the pricing, the volatility, and what I can risk 100% without taking me out of the game.
My 2 cents for folks who wish to use the above strategy for the NWBO investment. FYI this strategy does not work very well for more established blue chips as they just don't move much.
Man ... if that was true it would be ... LoL
All this time, we've been moaning about lack of coverage from Wall Street only to find out all capable and qualified analysts have bought shares. LoL, yeah ...
I'll file this in my <1% probability (highly improbably, but not impossible) folder.
Fair, I just think it is too difficult to present any PFS with all of these different cancers and many that have metastasized.
Your point is well taken, but to share PFS data at this point will create a lot of confusion. Folks with limited knowledge about the subject will just execute an overall median and come to a conclusion that the PFS is horrible when it really is not and depends on the cancer / treatment / dosage / schedule / metastasis / etc ...
In addition, the Phase I Direct trial did not specify that patients admitted had to have completed previous treatment within a specific time frame like DCVax-L trial required.
Thus, these patients could have already started progression right before the injection or right after the 1st injection. No controls were established within the Phase I clinical trials to test for PFS nor was there a need as it was meant to test for Safety and Tumor Shrinkage. Thus, even if a PFS metric was provided, it could not be accurate. There was no way to know when the start was ... especially if the most recent treatment of the Stage IV cancer was 6 to 9 months back.
What NWBO learned from this trial was:
1. It was Safe
2. The procedures utilized in Phase I does not appear sufficient to pursue a RECIST defined response across all solid tumors. Does not mean it cannot work for specific cancers given enough time.
3. There are several areas for improvement in terms of dosage / schedule / activation
4. PFS and OS endpoints might need to be considered if a RECIST defined response is unlikely to occur.
Apologies on the above, should have shared all my thoughts. I was typing fast and had to run somewhere.
Thanks for your responses Pyrr,
-- Regarding Stable Disease
My original inclination about PFS not being reported is because of the handcuffs designed into the current trial. My understanding of the Phase I trial was that most Patients were Stage 4 cancers that has metastasis across the body. DCVax-Direct was only injected into the main tumor. Thus, even though the primary tumor has shrunk or was impacted, other/new tumors are still growing or have expanded to different organs. I obtained my definition of PFS from here:
http://en.wikipedia.org/wiki/Progression-free_survival
specifically from this quote. "But progression may also be due to the appearance of a new lesion originating from the same tumor or to the appearance of new cancer in the same organ or in a different organ."
As this is a late stage cancer and DCVax-Direct was only applied to the main tumor and PFS is measured across the entire body, I think it is entirely fine not to report a PFS. In Phase II when the DCVax-Direct will be injected into multiple tumors, I will be very suspect if no PFS data was shared EVEN if it was not the primary endpoint.
Not sure if the above is correct, but hopefully convey's my comfort with the lack of a PFS statistic.
-- Regarding the Population of Slow Progressors in Phase I
I think your points about the population of patients NWBO had to select from @ MDA is very fair. One of the largest cancer hospitals, NWBO definitely had a diverse sample to select patients that could've resulted in a high number of Slow Progressors. Guess this will be a wait and see approach. Allow Phase I data to further mature and see over the next 2 to 5 years how many survivors.
-- Regarding Pancreatic Cancer mOS Discussion
I think you meant to say "even". Skipping the word itself, I guess my next question here is that the tumor has metastasis across the body. Thus, even though the general cause of death is cancer, would MDA be able to pinpoint the exact reason? Was it from the tumor that was treated? or was it from the complete failure of an organ that had a secondary tumor that ultimately killed the patient (i.e. Metastasized tumor to Lung blocks air pathway)
That trial handcuff of being able to attack only the main tumor makes me question the cause of death for any patients that has passed away. Depending on where the Stage IV has already metastasized to will determine whether or not enough time was give for the immune system to launch a systematic defense (or some version thereof). Some patients were luckier than others because the cancer had spread to areas that were not as critical.
Of course the theory I presented above assumes DCVax-Direct works and is effective to some degree. All of what I described and your own conclusions about DCVax-Direct's limited capabilities are valid. In the end it will take a well thought out Phase II/III trial to prove both our points.
-- All Other Points that You've Shared Where I Have No Additional Comments
Thanks, understood
Thanks Pyrr for sharing another perspective to the data on DCVax-Direct that was presented.
A few additional considerations ... you probably already considered but not highlighted in your post:
1. Stable Disease also implies that the primary tumor has decreased up to 30% in size. Partial Response requires a >30% response.
2. Based on the 5-Year survival rate % for each cancer that I shared a few days back, I find it highly improbable that the clinical trial would've recruited a number of "Kris Carr". It is possible Alan Butler was one of these cancer survivors, but I don't think it is applicable to the entire group. Even with selective criteria, the probability of being able to find "Kris Carr" similars is non-existent.
3. I fully agree on the failure of future PIII trials that you've stated in your write up below. As this was Phase I, I appreciate the fact that the company used this opportunity to understand a bit more about their product AND variables that they can influence for the next trial. Yes, the trial was selective, but it might have been done to ensure they could reasonably separate groups of folks to understand the impact of Method A vs Method B, different dosage schedules, and different dosage volume.
Now that they have collected more information about DCVax-Direct, the Phase II trial can be more targeted and leverage to gain more information than a Phase III.
Though for a successful PIII trial, I do hope the company definitely considers some of the points you've made below.
Additional Questions:
1. With regards to your suggestion about measuring effectiveness of the DCVax-Direct treatment by providing a detailed analysis of each patient's life expectancy, would the information be accurate enough to share? I don't know how I feel about providing life expectancy numbers considering all of these patients have gone thru a number of different treatments (average 3) ... thus confounding any kind of life expectancy estimates. In addition, life expectancy estimate vary so greatly considering the point they joined the trial that not sure even if the numbers shared would be accurate. Let me know if you share the same perspective.
I agree that what is necessary is the need for a controlled group, but that is something that will happen in Phase II and PIII
2. To clarify on the DCVax-L modeling, based on the German paper of only 49 randomized patients, is the new suggestion that the most recent Trial re-sizing due to an over performing control group rather than an over performing treatment group?
3. For trial participants, even though only survival is mentioned wouldn't that be enough considering how sick these patients are. The stage IV pancreatic cancer mOS = 3.9. From the DCVax-Direct trial's 7 patients, the mOS = ~7.5. I know n = 7, but I mean that would be the most apples to apples comparison, I believe. Unfortunately, I am not a Bio Stats guy so I will defer to you in this. I know the above result is not significant as the sample size is too small.
But the question is, do you believe with all of the information gathered about DCVax-Direct (dosage, volume, activation, etc) and the 3 Phase II trials determined that future trials have a higher probability of success?