Replies to post #16377 on NorthWest Biotherapeutics Inc (NWBO)

[sentiment_stocks]

Revenue from German PEI (Paul Ehrlich Institute) revenue is what I meant. I may not have been clear in that post to BSB. But what I meant to say is that sooner, rather than later, Germany will, through this HE program, be paying for patients to receive L.

That ought to make our shares worth more than what all of us has as a base price ($3 to $8ish?) depending upon when you got in and if you've added on dips or highs (I've done both :) ).



Smith on Stocks (from March 11) on German HE and PEI approvals:

What is the Investment Importance of This?

This is a stunning coup for Northwest Biotherapeutics. While the phase 3 trial will still need to be completed and be successful in order for Northwest to obtain a full approval and marketing authorization for DCVax-L, it is extremely encouraging that one of the world's premier regulatory agencies believes that clinical data created before the phase 3 trial is sufficiently convincing to make DCVax-L available on an early access basis for all glioma patients. This is an extremely positive validation of the product and also of the manufacturing and infrastructure that is in place for producing, handling and distributing the product.

and...

Stock Market is Uncertain

The early market reaction to the news shows confusion and lack of understanding of the importance of this news. This is the first time that investors have had to evaluate a product made available to patients in this way. Also, there is no counterpart to this Hospital Exemption approval in the US system. It is a totally new experience and its importance has not yet sunk in.

As we all know, NWBO has been the subject of ongoing bear raids led by bloggers who have claimed that there is no credible evidence that DCVax-L is effective. One particularly negative blogger stated that the drug is no better than placebo. This action by PEI shatters their investment conclusions. The bears have feverishly been tweeting today that this is not important new information and trying to create negative spin.

Heck, I may as well post the rest of it so you don't have to go there...

What Is The Commercial Opportunity?

Germany has a population of about 82 million which is nearly 25% of the US population. The incidence of glioblastoma in the German population is believed to be the same as in the US. Using the common estimate that there are 12,000 newly diagnosed glioblastomas per year in the US, this implies that there are about 3,000 in Germany. At a price of $50,000 to $100,000 per year (again this price is speculation on my part as reimbursement negotiations have not yet started), this would represent an annual addressable market of $150 to $300 million if DCVax-L could be directly promoted to all physicians (which it can't under a Hospital Exemption). It is extremely important to understand that the glioblastoma market addressed through the hospital exemption will be less; I don't have an estimate at this time.

There are additional patients with other forms of glioma and recurrent glioma patients that could increase the addressable hospital exemption market beyond the estimate for glioblastoma; I don't have an estimate at this time. The Company is emphasizing that the importance of this hospital exemption approval is the validation it provides and the opportunity to practice now for future commercialization; investors should not, repeat should not, expect a rapid ramp in revenues.

Obviously, there is no historical precedent to gauge the ramp of revenues as this is the first systemic drug approved under the section 4 exemption. It will certainly be quite different from (and much lower than) the sales trajectory of a drug receiving a normal approval. There are perhaps two divergent and salient points to consider: (1) a new drug to treat glioblastoma and other gliomas is urgently needed and patients are desperate for any new therapy that might help them and (2) there may be greater caution by hospitals because the drug has not gained access to the market under the normal approval process and DCVax-L cannot be directly promoted; again no estimate at this time.

My uninformed judgment is that the sales ramp will be slow and gradual in 2014. The reimbursement negotiations will slow the uptake in the early phases until negotiated prices are in place. In addition, NWBO cannot market DCVax at all under the Hospital Exemption, and cannot promote the pluses and minuses of DCVax-L (although of course patients and physicians can spread the word). Also, because DCVax-L is an autologous product, there are considerable logistics issues for the Company to handle. Remember the problems that Provenge encountered. I think this will cause NWBO to move slowly; they don't want any glitches in the manufacturing and delivery of the product. They will want to move slowly and methodically to make sure their logistics processes are dependable.

So what is my guess for 2014 German revenues? I would note that each patient treated could lead to $50,000 to $100,000 of gross revenues if my speculation on price is correct. I want to re-emphasize that management absolutely refuses to comment on the potential price. If my guess is correct, in order to reach $1,000,000 of sales, 10 to 20 patients would have to be treated. My guess is that there will be perhaps $1+ million of sales in 2014. I have minimal confidence in this estimate.

There is an argument that uptake could be more rapid in 2015 as the initial kinks with the introduction of the product under the hospital exemption early access approval are worked out. Let's imagine that you are a newly diagnosed glioblastoma patient speaking with your doctor who can prescribe DCVax-L under the hospital exemption early access program. You are told that your life expectancy is about 14 to 18 months with standard of care. There is one other option that can be offered to you and that is DCVax-L. The only data available is from two small phase 1/2 trials that showed that about half of patients in that trial lived four years or more. The drug is administered through a series of sub-cutaneous injections and the side effects are relatively benign and in no way resemble those of chemotherapy. This is a pretty compelling proposition.

Investment Conclusion

I remain a buyer around the current price of $7.90. I think that it is going to take some time for analysts and the investment community to get up to speed on this for reasons that I have detailed. As this happens, I think that the current valuation expands.

There was considerable shorting of the stock last week and one source I checked shows that there are 4.6 million shares short. I can see a short squeeze developing as investors analyze and understand the significance of this news.

http://seekingalpha.com/article/2080583-analysis-northwest-biotherapeutics-dcvax-l-germany-approval-under-hospital-exemption-early-access-program