Northwest Biotherapeutics: No TLD Yet
Dec. 19, 2021 12:12 PM ETNorthwest Biotherapeutics, Inc. (NWBO)14 Comments
Summary
NWBO still has not announced toppling data, or TLD.
This situation has been ongoing for more than a year after data lock.
I will continue to hold, but will not add to my small position.
Today is exactly one year since I wrote about Northwest Biotherapeutics' (OTCQB:NWBO) impending unblinding. Given what we saw from interim data in 2018, and the pedigree of DCVax-L, and the experts vouching for the product and so on, and not to forget the 18-year long trial, nearly unheard of in biopharma - given all of these, the unblinding would have been a momentous affair. However, after more than 14 months of data lock, we still do not have unblinded data from the trial.
The thesis is simple enough. Glioblastoma patients hardly survive a few months after the disease is detected. 12-18 months is the average survival, only 25% live beyond one year, only 5% beyond 5 years. Patients from the Phase 3 trial of DCVax-L have continued living way, way longer, with median survival of more than three times the standard GBM patients. However, because the trial is still blinded, we still do not know if, by some miracle, placebo patients have survived this long. If only DCVax-L patients have shown such outstanding survival rates - which is the likelier explanation for the data - then these results are truly outstanding. However, the company's unbelievable delay in unblinding the data, and their studied silence, have wrecked the stock.
In their latest 10-Q, as before, the company has continued to blame Covid-19 for the inordinate delay:
As previously reported, coronavirus-related difficulties have impacted most aspects of the database lock and the process of analyzing the Phase III trial results, especially with the successive waves of COVID-19 cases in many areas. The independent service firms have had limited capacity, and restrictions on operations. Key experts at certain specialized service providers have been unavailable for periods of time due to illness in their family. Other experts have gone on extended leave due to restrictions on operations. Clinical trial sites have not allowed personnel from the contract research organization managing the trial, or other service providers, to visit the sites for trial matters such as data monitoring and collection activities. Clinical trial site personnel have been unavailable due to being reassigned for COVID-19, and the limited site personnel have had to work under restrictions. Committee processes and regulatory processes have been similarly focused on COVID-19 matters and delayed on other matters. Firms such as the ones storing the Phase III trial tissue samples that are needed for certain analyses, and the firms conducting the analyses have had only limited operations. Even logistical matters such as the shipping of materials have been subjected to substantial restrictions and delays.
Northwest Bio is not the only company running a trial during the pandemic. Other companies have successfully completed trials and had their drugs approved. Even the FDA, which from all indications has suffered the pandemic poorly, has continued holding PDUFAs and approving drugs. Therefore, Northwest Bio's long Covid-19 disclaimer does seem a little too defensive. The company is nearing the brink of a financial precipice, and doubt remains about their being a going concern for too long:
Because of recurring operating losses and operating cash flow deficits, there is substantial doubt about the Company's ability to continue as a going concern within one year from the date of this filing.
Northwest Bio managed to get $15mn financing in late November with what appears to be considerably lenient terms given the situation:
Northwest Bio…announced the closing of a $15 million financing on November 22, 2021, which brought the Company's cash reserves above $20 million.
…The financing is in the form of a 22-month loan which requires no payments for 8 months, and then provides for a subsequent 14-month amortization period. The loan has a provision for prepayment, an annualized interest rate of 8% and OID of 10%. Upon announcement of the top line data ("TLD") from the Company's Phase III clinical trial of DCVax®-L for Glioblastoma brain cancer, the lender will have a then-springing right to exchange the outstanding balance of the loan for common shares priced at the price of the first private placement transaction following TLD less a 12% discount, and to purchase another 50% of that number of shares at the same price. This then-springing right expires 14 days after that post-TLD private placement.
Clearly, the lender is hoping for superb top-line data from the trial, when they can make a windfall by buying shares at a discount.
This lender has more money and more optimism than a lot of us NWBO shareholders. I took a position in NWBO three months ago, and my holdings, although small, have fallen in value by nearly 50%. I do not plan to increase my position, however I am not going to sell out either. They just announced that their UK facility has been granted a license to work with human tissues for medical products by the UK Human Tissue Authority (HTA). They also announced that the UK Medicines and Health Products Regulatory Authority ("MHRA") has inspected the facility as part of a process of granting license to manufacture products like DCVax-L. Northwest Bio will continue to make such minor announcements, and shareholders such as us will continue to hope, against all logic, that this company will one day deliver what we have been waiting for nearly two decades - TLD.
This article was written by
Avisol Capital Partners
