Replies to post #556751 on NorthWest Biotherapeutics Inc (NWBO)

[abc1212]

hyperopia, many thanks for this clear and well balanced report.

You are spot on with most points, especially the explaination of why Northwest takes so long.

I've always believed LP has set a minimum price, and BP knows this price, and from their standpoint, Northwest needs to hit certain milestones to acheive it. At least one approval being one of them.

We're getting there, slowly but surely.

It's only a matter of time.

[biosectinvestor]

Thanks for the summary re the ASM. We agree on most points


20% total ownership for employees is kind of standard for ventures with esops, not for one person, for all of the management team and board. Really not unusual. I have seen that debate before. People saying the same thing. 10% is not adequate participation in the success and risk.

LP is a bit unusual because of both her roles and her early ownership of the company and efforts to get it here as well. So getting their stake to a reasonable percentage, I do not feel is entirely what others think it is.

“How much option pool should founders allocate?

In the US, ESOPs are typically increased from 10% at seed to 15% at Series A. The ESOP then grows with each funding round – reaching up to 20%, or even 25% by Series D. In the EU, seed ESOPs are usually set at 10% and flattens in future rounds. On average, EU employees end up with half as much ownership in later stages compared to their US counterparts.”

https://www.scalexventures.com/content/the-fundamentals-of-employee-stock-options

The reality is that we’re at the end of a certain stage and these people have loyally driven the company to this stage. Getting them the expected ownership at the end seems reasonable to me.

This is also not a tech company in the way that we see in Silicon Valley, there has been far more risk and dilution is a necessary part of a long drug validation process. In Silicon Valley, they can get to cash positive quickly with a big category product, but in this space, especially new areas like cell driven treatments, the validation process has been risky and long for all of the companies in the space. Plus you have the spoofing and other activities. Not really ideal to make the employees bear that cost. They are the ones doing the work and it is better to keep them inside the tent, working for our success than shopping their specialized knowledge to competitors.

[CaptainObvious]

Excellent insight

[evanstony]

Shareholders are clearly not being told everything that the company is planning, and working on, so I do anticipate a few pleasant surprises this year.

IMO you are right... many surprises this year that are very pleasant!

[meirluc]

Great analysis of the ASM, Hyperopia.

I just have a question about one of your following statements:

[/We also now know that construction on phase 1b (expanding Advent’s production development space, and adding more cleanrooms) has been on-going for months.quote]

Why would they be adding more cleanrooms at Sawston if they thought that they could
promptly switch production to the automatic Flaskworks/EDEN method? This sounds as if they have realized that for some time after approval, they will have to utilize manual manufacturing because most likely, it will take them a long time to receive approval for the Flaskworks/EDEN automatic manufacturing system.

[Poor Man -]

Really excellent observations, and obviously appreciated by many on the MB.

But none of this has to be true, and this reflects badly on management’s judgement and decisions. The “tiny company” description — used by many — is probably a bit over played when describing a company that has spent over $1 billion in capital and burns through significant amount of expenses, a large percentage of which is unrelated to the trials. (See: 20% management bonuses and annual SG&A Expense.)

It does sound like they desperately need a BP partner. And they probably need some tough love from the influential warrant holders as well.

reality check
Northwest Bio’s technology, their associated scientific advisors, and medical doctors, have always been on par or better than anything from Big Pharma, but this shareholder meeting was another reminder that Northwest Bio is still a tiny company that is under resourced and almost, but not quite, ready for prime time. They are continually behind schedule of where I, and many others, think they should be. There are many examples of this but a couple highlighted during the meeting; the contractor that is now working on all the patient data files that Linda described, could have been tasked and finished with this work over a year ago, rather than still working on them over the past few months. Northwest Bio has a single supplier for a critical manufacturing component, and when that supplier is lost, they must vet another supplier which takes many months, while Big Pharma companies have many suppliers who have been properly vetted, and they can simply switch without causing delays.

Northwest Bio would benefit greatly from the resources that a strategic partner would provide, but are unwilling to make a deal that doesn’t properly value their technology, and they seem willing to wait until they’re better positioned to negotiate more favorable terms.