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Replies to post #289910 on NorthWest Biotherapeutics Inc (NWBO)
06/17/20 4:23 AM
What I Worry About
My analysis leads me to conclude that DCVax-L will show an improvement in mOS in ndGBM of 2.5 months or more relative to SOC and this will result in approval by regulatory agencies throughout the world. However, when it comes to drug trials, nothing is for sure and it sometimes seems if anything can go wrong, it will. So, what do I worry about?
There may be millions of data points that are part of the collective analysis of the trial. Given the long time frame over which this trial extended, there might be troublesome missing data.
In the same vein, a meaningful number of patients might have been lost to follow-up.
Results for the blinded data might have been driven by one sub-group. For example, DCVax-L might have been very effective in MGMT methylation patients and not effective in non-methylated patients. How would regulators handle this?
Because of the cross over design of the trial, only around 30 patients received just SOC in the trial and about 69 who started on SOC were switched to DCVax-L when their cancer progressed. This presents a lot of complexities in determining the effect of DCVax-L in comparison to SOC.
If the previous point proves troublesome, regulatory authorities may be forced to consider the effects of DCVax-L plus SOC versus historical SOC data from other trials. They generally don’t like to do this.
Regulatory approval is not just based on clinical trial results. A BLA filing must also demonstrate that the manufacturing process can reliably produce a drug to tight specifications in patient after patient. The autologous cell treatment process used to produce DCVax-L from cells taken from the patient is not well established and there could be issues.
Because Northwest is such a small and unknown entity, the regulatory agencies may be more cautious and demanding than with a larger company.
Many other things. Drug development is not for sissies
There is an urgent medical need for improving the treatment of newly diagnosed glioblastoma multiforme (ndGBM), the most aggressive type of brain cancer. The prognosis is extremely poor as about 50% of patients who receive the current standard of care (SOC) die within 18 months of being diagnosed and only 5% survive for five years. The annual incidence of ndGBM in the US is about 15,000 patients per year. Based on comparing prices for other oncology drugs approved for the treatment of aggressive cancers, a drug providing a meaningful increase in survival in ndGBM could be priced in excess of $250,000 per course of treatment. For example, the CAR-T drugs Kymriah and Yescarta that treat certain refractory/ relapsed leukemias and lymphomas have a net price of about $325,000 per treatment. This suggests a US addressable market of around $3.8 billion for a product that would meaningfully improve ndGBM outcomes when added to SOC. The European addressable market would be roughly the same size or $3.8 billion and the remainder of the world about $1.8 billion. It is a giant commercial opportunity for DCVax-L if it is approved.
The phase 3 trial of DCVax-L is nearing unblinding as discussed in my November 21, 2019 report. and investors are awaiting anxiously to see if the trial will be a success and lead to the approval of DCVax-L for the treatment of newly diagnosed glioblastoma multiforme (nGBM). The stock at $0.20 per share clearly is priced for failure as the market capitalization is less than $200 million. If the market perceived that DCVax-L had a reasonable chance for approval, analysis of peer companies suggests that the market capitalization could be well in excess of $1 billion. Of course, moving from a possible to an actual approval could trigger a move much higher than $1 billion. I will discuss possible price targets in a future report.
Based only on the expectation of there being a reasonable chance for success in the DCVax-L trial, I would argue that comparisons to peer companies would suggest that the current valuation should be $1, $2, $3 billion or more. As explained later in this report, I consider bluebird bio a comparable company and its market capitalization is $6 billion.
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