They were speaking about enrollment numbers IMO. The study has been on-going for over a year since the screening halt. The company continues to be in dialogue with regulators with regards to screening and the trial (according to Friday's filing). It is unlikely that they would need to speak to regulators about the screening halt if the trial was stopped over an early efficacy look. I continue to believe that it is unlikely that the screening halt (which has now changed as an enrollment halt) has to do with efficacy. I believe it is more likely to be related to screening. That said, the company did report the enrollment number as "good news". They can stop the trial at any time if they want to stop it. And yet they haven't. In fact, the scientists have only referred to it as on-going, double-blinded, still accruing patients and they have stated they have no news to report at this time. Also SEC statements refer to the "good news" enrolled patient number (well over 300-patients) and all follow up statement refer to patients continue to be treated according to the trial protocol, and the trial heading towards completion. Heading towards completion takes time depending on how quickly the trial enrolled patients. No one can report on the efficacy results until it ends. And what we know with certainty is that the primary endpoint results have not been reported. If they have it in had they have 3 days to report to us. And so each day goes by is another day it has not reached. And that is material information that they can not withhold.
As for the shelf offering. The company needs to raise money. All early stage biotechs need to raise. NW Bio is no different. It is why many of us urge caution when buying shares. No one can guarantee the bottom will not breach. But many long term shareholders, including NW and Cognate have not released shares within the last year. And many retail shareholders have been holding considering the market cap valuation is low and by all means if the company reports success it should rise substantially, so folks have been buying. The longs recently gained control of the stock direction. The shorts may gain re-control depending on how the company raises or with what news goes along with the next raise.
I added some shares when the MFN clause ended. I know how they raise affects their shares just as much as it affects mine. I have not gone all in as again, I expect volatile until news on the clinical front is revealed. At this point it is unclear who will have control of the stock direction. But, the market needs good news to continue the uptrend. None of us know how many shares the market cap will include once we final hear resolution or primary endpoint information on the Phase III. That number ultimately determines where this stock could be valued in the future (when accounting for success). I remain caution on the stock situation. But optimistic on the clinical front.
Friday's registrational was vague. It allows the Company to do a raise at whatever means necessary, including offering shares by means of a partnership. I don't think anyone is expecting them to attempt to raise $150 million in one raise. This registrational covers three years. It's almost as if no news came out, but it is a reminder of how much funds they will need over the years and the shorts will attempt to use it as a reminder. Being vague about clinical progress is different than being vague about financial raises. The silence isn't necessarily good news for shorts. We need to see a supplemental to learn if the terms of the next dilution they do is a bad deal for longs. None of us knows exactly how they will raise over the three years. None of us know if a partnership will include terms for shares, it is an option within. I admit I'm skeptical on that front at this stage. But I do believe a partnership with a CI at minimum is coming. But they would need money to fund such combination projects. And if a partnership is forthcoming then perhaps the company's pipeline will get a second look, and be reviewed more favorably by the market. If intend to pay for Direct studies, they will need large sums of money. The registrational in this case is the first step. Prior to a "true" financial raise they would need to release a supplemental. And we would need to know the terms of whatever agreement they enter into, hence that supplemental.
Each raise affects each biotech differently. Many variables go into it, including terms, market cap, shareholder support, pipeline, collaborations, pending milestones to name a few. The effects of the raise are determined by those such aspects. Not all raise affect biotechs negatively, including ATMs. There are some that see their stock price rise while during a raise period. In their case a substantial raise would remove the concern over imminent bankruptcy. And any significant dip may cause the shorts to cover. But, again it's going to depend on the factors relating to the exact terms of the raise, and any market news that comes before or after. But they, NW Bio have three days to file a supplemental. And that part is important as the first part. The participants of the deal have a head start of such terms. One part is clear is that the company attempted to raise at whatever means necessary to keep Phase III moving towards completion. And I have no doubt that they will continue to do that. Again, I find comfort that at this point, they are going to do whatever is in all our best interest to pay for Phase III, raise money for their combination studies and that there no longer is favoritism with MFN clause. Whatever dilution they do hurts them as much as it hurts me, so I'm expecting that they will be doing the best they can not to hurt the future value of all our shares.
GL to longs.
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