NorthWest Biotherapeutics Inc (NWBO)

[gnawkz]

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.