NorthWest Biotherapeutics Inc (NWBO)

[notbrad]

The $10M contingent/deferred payable is a positive. I thought it may help to summarize the Cognate deal as follows:

NWBO owes Cognate	            52,000,000 	shares 
 Cognate gives up entitled shares    40,000,000 	shares 
 Applied price per share (guess)	    0.33 	 
 Value of shares foregone	   $13,200,000 	 
 		 
 NWBO deferred payment- due 2020	     1,200,000 	 
 NWBO upfront payment - now	     2,000,000 	 
 Payment to Cognate upon approval    10,000,000 
     Total	                   $13,200,000 	 
 		 
 Reduced billing from Cognate 	   $10,000,000  
 

There are basically 2 observations: (1) Cognate decided to accept today's cash value for the 40M shares. This is technically not de-risking their exposure to NBWO because they are getting only $2M in immediate payment for their total exposure valued at $13,200,000. If the trial fails, they lose $11.2M; (2) The $10M reduction in billings is a net give-away to NWBO.


Not sure I understand this deal at all. If DCVax-L is a success, Cognate will recoup $11.2M - nothing more. If the trial fails, they will get nothing at all if you assume NWBO goes bankrupt (unless Cognate sees value and priority in claims on the IP for Direct). I'm puzzled, but looks like an overall great deal for NWBO. Why would Blackstone allow it?