A message to fellow investors:
Hi! I’ve been a long time lurker on these forums and have been following NWBO very closely for the last three years. For a while now, I have wanted to write an article regarding my methodology and research into this company, and with ASCO right around the corner I feel like now is a good time to do so. For those who don’t want to read through my whole post, the long and short of it is this: hang in there! I believe that within the next 12 months long-term investors will be richly rewarded.
The first thing I want to discuss is my own bias. Full disclosure: I own 9000 shares of NWBO - a few hundred of these were purchased a while back when the stock was $3 per share, but most of my shares were purchased at the rock bottom price of 15 cents. When it all adds up I have a few thousand dollars invested. So while I do have a little skin in the game, it’s important to note that my position does not represent a significant portion of my net worth. If NWBO goes belly up I will of course be disappointed, but I will otherwise be just fine. I will not be in a panic one way or the other, and that should give everyone some confidence into the clarity of my thoughts on this matter.
I think the first thing that we as investors need to realize is that the market still sees this as a very high-risk stock. Despite the good news from the JTM publication (and make no mistake, it was excellent news), we still live or die by whether or not DCVax-L gets FDA approval. Until that happens, NWBO has no actual revenue stream, and any major investment firm will simply not touch it. It’s just too risky. The stock could quite literally drop to zero on nothing more than bad news. Would you invest millions of fund capital on something that risky? Of course not. So with that in mind, I’m not surprised that the JTM publication only moved the needle +30%. You would be absolutely crazy to invest anything other than money you could afford to lose.
However, after significant research and reading between the lines, I believe that the likelihood of FDA approval is very high, and when you consider that in conjunction with the absolutely-absurd risk to reward ratio, I believe that this stock is tremendously undervalued. Upon the unblinding of the trial data (and upon subsequent FDA approval), I believe we will see a run up in price the likes of which will be historic.
The research:
I am convinced that the general public has vast misconceptions about how cancer actually works. To that end, I have read several oncology textbooks on the subject, and I encourage everyone do the same. What many people don’t realize is that cancer is a genetic condition, and furthermore, it is a condition that constantly evolves and mutates. One person’s glioblastoma is going to have a slightly different DNA profile than another’s… which is why cancer is so difficult to treat. There will never be a “magic pill” that cures all cancer - that is sad misunderstanding of what the condition actually is. Personalized therapy is the future, and that is why the science behind DCVax is so intriguing: a vaccine that’s personalized to a patient's specific genetic makeup. Conceptually it makes sense, and that is what initially piqued my interest in the company.
Likelihood of FDA approval:
I am not going to do a statistical analysis of the JTM publication data. There are so many conflicting opinions on how to interpret it, and there’s really no point to discussing them all as I imagine we’ll get the unblinded results before the end of the year. But even the harshest critics have to acknowledge: the JTM article is overwhelmingly positive. If the unblinded data reflects or improves upon the JTM data, an FDA approval is very likely. It is also worth noting that 69 doctors signed on to this. Do you honestly believe that 69 doctors would sign on to something that they didn’t think was effective?
I’ve read some criticism of the impact score of JTM. Honestly, who cares? If the drug works, it works, and if it doesn’t it doesn’t. There are dozens of reasons that a more prestigious journal may have turned this article down, and I’m sure that JTM has published several studies of drugs that have gone on to FDA approval.
What is of particular interest is the long-tail survival curve. I cannot state this enough: THE LONG TAIL SURVIVAL CURVE EXPLAINS A LOT OF NWBO’S DECISION MAKING. This explains why the trial has taken so long. Something many people don’t realize is that once you unblind the trial results there is no going back. The trail is over and data collection stops. You can’t go back and collect more data on the long-tail curve once the “horse has left the gate.” So what I imagined happened, is that when they noticed that a significant chunk of patients were living longer, NWBO made a decision to extend the trial longer than they had anticipated. A great long-tail survival curve will not only guarantee FDA approval, but it will make this drug the new standard of care (SOC) for GBM right out of the gate. While it may seem frustrating now, it is the best way to reward all the long-term investors for the tremendous patience that they have shown.
Also of particular interest: while researching the effectiveness of this drug, I actually looked up the social media pages of various participants in the trial. I was blown away by what I found: this drug has produced extraordinary results for certain individuals. I am particularly moved by the success of Jamil Newirth. He has lived nearly 7 years after being diagnosed with stage 4 GBM. That’s incredible. But what’s even more astounding is how healthy he currently looks. I looked up a youtube video of a charity event he attended earlier this year… the man looks like an athlete in his late 20s. Anyone who has experienced a loved one going through chemo will know what I’m talking about… chemo will put 20 years of age on a person in a matter of months. It is a nasty medicine, and for this guy to be looking as good as he is (and living the quality of life that he is living) is absolutely astounding. And by the way, Jamil is quoted in articles giving DCVax-L and Dr Liau the credit for his life. I find it very hard to believe that this drug did not significantly contribute to the improvement of his situation.
Risk vs Reward:
If the long-tail survival curve is as good as the JTM publication indicates, I don’t think it’s a stretch to say that DCVax-L will be the new SOC for GBM, and upon FDA approval, we’ll be looking at a stock price of between $10-$15 per share. That’s already a six figure return on my current position, and that risk vs reward ratio easily justifies an investment of a few thousand dollars. But what most people fail to consider is what could potentially happen 5 - 10 years down the road with DCVax-Direct. If DCVax-L has a great long-tail survival curve, it makes sense that the same technology personalized to other malignant tumors could produce similar results. And since DCVax has one of the best safety profiles of any cancer drug ever conceived, there is no reason why such a drug wouldn’t be included in the SOC for every malignant tumor diagnosed assuming it is shown to be effective. If that were to happen, the revenue from that drug would be astounding. Some simple math will demonstrate the potential:
-The national cancer institute estimates that 1.7 million new cases of cancer will be diagnosed in 2018
-Assuming a $25,000 per year cost to DCVax-Direct, you’d be looking at $42 billion dollars in revenue PER YEAR from new cases of cancer alone. When you consider that people will probably need to take the vaccine for several years, you’re looking at yearly revenues of double to triple that amount. A company selling a drug like that would have a market cap of several hundred billion, making those shares worth several hundred dollars each putting my long-term return in the millions.
So yes, there is significant risk involved, and yes, my entire investment could go to zero… but when you consider the reward… a few thousand dollars that could potentially turn into hundreds of thousands (and ten years down the line potentially into millions)… I’ll take that risk any day of the week.
NWBO management:
Obviously they have made some mistakes. The biggest of which is that they simply did not plan on the trial taking this long, and subsequently ran out of money. That’s a pretty big mistake for a biotech, and they way they have dealt with it from a PR standpoint has been pretty terrible too. That is why the stock price sits at 30 cents per share right now, and that is why big-time investors are weary of pouring more money into it. I get that, and I acknowledge that, but that doesn’t mean that the drug isn’t real. I also think that it’s pretty ridiculous for anyone to say that NWBO are a bunch of scammers. DCVax-L is a real drug, Linda Liau is a real doctor, and this is a legitimate clinical trial. 69 doctors would not sign on to a money making scam. Linda Powers would not have recently invested $1 million of her own capital into a scam. Furthermore, I don’t think she’d be wasting her time with this company if she thought the drug was a flop… I don’t particularly have any real trust in Linda Powers, other than to say that I believe that she simply wants to make money, and I don’t think that she’d still be here is there wasn’t a potential for NWBO to make a fortune. I think the fact that management has still hung around says a lot.
Adam Feuerstein:
Boy… this guy is a real piece of work. I believe that he is shaking in his boots right now. He is heavily invested in NWBO’s failure in order to validate both his ego and his career. I would take anything he says right now with a grain of salt. He has attacked NWBO with a viciousness that I have never before seen, and as the old saying goes… “the lady doth protest too much, methinks!” If DCVax-L gets an FDA approval it will be the single greatest humiliation of his life. It would be a PR nightmare for him… that he attempted to take down a biotech company that was all along saving lives and revolutionizing the way doctors treat cancer… what kind of a sick, twisted individual does that? He has really gone all-in on slamming NWBO, and if they prove him wrong any credibility he has will be right out the window. It may destroy his career.
The Future:
I think the unblinded results will be out soon. Probably before the end of 2018. At this point… what more data do they have to collect? They have people living 7+ years… what more of a long tail do they need? I believe that the latest round of financing (the billion share dilution) was done specifically to raise money for the FDA approval process and for the initial production of the drug. Dilution isn’t fun, but honestly, it’s either that or a buyout. No other way to raise the necessary capital to bring this drug to the market.
Good luck to all - especially to patients hoping for a cure! Looking forward to ASCO!
