NorthWest Biotherapeutics Inc (NWBO)

[hyperopia]

Thoughts about the exclusive in-licensing deal . . .
Linda Powers continues to build long-term value for the company, even if it isn’t recognized immediately in the stock price (on the manipulated OTC). While it’s unclear (to me) exactly what Roswell Park’s intellectual property or programs are covered in this agreement, (or Dr. Pawel’s previous work at the University of Pittsburgh) what is clear, is that Northwest Bio (which has considerable dendritic cell expertise, and knows what to look for) has scanned the world searching for complementary, and potentially competing technology, and has found what it thinks is the most promising and advanced dendritic cell technology outside of the company, and licensed it . . . for a song. Northwest Bio has expanded and strengthened their dendritic cell therapy technology portfolio and has solidified their position as the world leader in dendritic cell therapy for the foreseeable future.

Northwest Bio has spent the past several years strengthening, preparing, and filing their marketing application, while also developing the Flaskworks automated manufacturing technology that will enable the large-scale production of dendritic cells for commercial use. This has put them years ahead of any other competing dendritic cell therapies (Provenge aside). In making this agreement, Roswell Park basically acknowledges that fact, and has ceded the ground. So what Northwest Bio has done with this in-licensing agreement is basically turned potentially competing technology, into a potential asset for Northwest Bio. Since some of this technology is already in phase II trials, if it succeeds and Northwest Bio is able to use this technology down the road, the development time required will be considerably reduced.

As Northwest Bio advances to the next stage of development, and begins collaborating and designing clinical trials for the next generation of DCVax products (and their combinations with other agents) with doctors Linda Liau, and Pawel Kalinski, who have been studying dendritic cell therapy and their interaction with the immune system for over 20 years, it will be certain that these products are going to be the state-of-the-art, and incorporate the vast knowledge gained by the foremost experts in the field. This deserves repeating . . . As Northwest Bio advances to the next stage of development, and begins collaborating and designing clinical trials for the next generation of DCVax products (and their combinations with other agents) with doctors Linda Liau, and Pawel Kalinski, who have been studying dendritic cell therapy and their interaction with the immune system for over 20 years, it will be certain that these products are going to be the state-of-the-art, and incorporate the vast knowledge gained by the foremost experts in the field.

This announcement also alludes to Northwest Bio’s future plans which not only include preparing to commercialize their first product, but what appears to be a fairly large development plan, with many clinical trials across both product lines, and potentially others. This obviously will require significant capital, so there clearly must also be a plan to raise what I would estimate to be a minimum of $150-200M. The other shoe yet to drop, is how they intend to do this. A regulatory approval (and pathway to revenues) will de-risk the stock, and potentially open access to institutional or partnership capital, which are the most obvious options, but there are others. Northwest Bio often seems to take the unconventional path and tends to surprise, so the real question for me is: What is the color of this elephant in the room?

I don’t expect to get an answer to this question at the up-coming shareholder meeting, but I do anticipate that we’ll get a little more color on this exclusive agreement.