NorthWest Biotherapeutics Inc (NWBO)

[Gus McCrae]

I cannot believe anyone is still talking about whether the Cognate/CRL contract is still effective.

Here's the deal, again (not for you Ex, but for anyone else that is reading this): Either the Cognate/CRL agreement was terminated or NWBO is not in compliance with securities laws and obligations because it was not disclosed on the Form 10-K exhibit index. Actually, if it was terminated for any reason than the term expiring, they should have filed a Form 8-K disclosing that event...but I digress.

The only way that the contract could still be valid and not have to be included in the Form 10-K exhibit index is if the company determined that the contract was no longer material. That's not possible under our facts, unless the company has no intention of having DCVAX-L manufactured in North America in the near future (which the risk factors do suggest--see the last quote below).

There are also the Company's own words that some people around here just don't want to accept. From the 2020 Form 10-K:

We rely upon specialized contract manufacturers, operating in specialized GMP (clean room) manufacturing facilities, to produce all of our DCVax products. We have worked with several such manufacturers, in several different locations, during various periods of our clinical trials and our compassionate treatment programs, including Advent BioServices, Cognate BioServices and the Fraunhofer Institute. We will need to enter into new contractual agreements for manufacturing at our Sawston, U.K. facility and new agreements for commercial production in any locations.

Now look at what the Company said about manufacturing in the same risk factor provision, but from the 2019 Form 10-K:

We currently rely upon Cognate BioServices, Inc., or Cognate, to produce all of our DCVax product candidates for the U.S. and Canada, and we currently rely upon Advent BioServices Ltd., or Advent, to produce our DCVax products for Europe....We have an existing agreement with Cognate BioServices for manufacturing in the US and an existing agreement with Advent BioServices for manufacturing in London. The existing agreements require us to make certain minimum monthly payments to Cognate BioServices and to Advent BioServices in order to have dedicated manufacturing capacity available for our products, irrespective of whether we actually order any DCVax products. The agreements also specify the amounts we must pay for Cognate BioServices’ and Advent BioServices’ manufacturing of DCVax products for patients.

We negotiated a new agreement with Cognate for production of DCVax-Direct products in 2019, and we will need to negotiate a new agreement with Cognate in 2020 for production of DCVax-L products for commercial purposes and new programs. We also need to negotiate an agreement (Statement of Work, or SOW) with Advent relating to the design, development, buildout, testing, regulatory inspection and regulatory certification of a new manufacturing facility in Sawston, UK, and a new agreement with Advent for production of DCVax-L products in that new facility when it is ready.

Someone should call DI and ask him about the status of the Cognate/CRL agreement. He should be able to answer that question. The ability to manufacture in North America is critically important, and yet, there is apparently no existing agreement. I mean, does anyone here who has any real life business experience really think that CRL is spending a substantial amount of money ramping up for DCVAX-L production without a signed agreement? What would be the purpose of not disclosing the signed agreement, or keeping it in LOI format or something that might not technically trigger an 8-K filing event? Why in the world would they do that? What is the benefit to anyone in keeping this stuff secret? And why wasn't it a secret in 2019, but now it is? The existence of a manufacturing agreement doesn't have anything to do with the release of TLD, a journal article, the FDA or anything else. But it would allow investors to see that they actually have a way to produce DCVAX-L in North America. Right now, we don't even know that they INTEND to manufacture in North America. From the 2020 Form 10-K:

Our intention is for the U.K. facility to manufacture DCVax products for both the UK and other regions. However, this may not turn out to be feasible, for regulatory, operational and/or logistical reasons. It is also unclear whether or how Brexit will affect or interfere with these plans in regard to Europe.

From the Company's own disclosures, they only mention North America and Europe as places they intend to seek regulatory approval. It seems like they are telling us that there will be no manufacturing in the US, at least initially. I sure hope this was sloppy drafting, but with the removal of the Cognate agreements from the 2020 Form 10-K exhibit index and the substantial changes in the disclosures surrounding manufacturing between the 2019 and 2020 Form 10-Ks, I am not so sure it's just sloppy drafting. I honestly don't know what to make of the situation.