Replies to post #161035 on Biotech Values

[alexander77]

Why June 2013 could change everything for NWBO:

June 2013 primary completion data for phase III DCVax-L

http://clinicaltrials.gov/ct2/show/NCT00045968?term=northwest+biotherapeutics&rank=1

What does that mean? Therefore I would like to quote Larry Smith (article from SA Feb 25)

"The Phase III Clinical Trial Design

The phase III trial is now underway and one of the things that must be focused on is the phase III trial design. There are lots of examples of clinical trials in biotechnology, in which drugs that were ultimately approved produced disappointing results in initial pivotal trials because of trial design and/or execution. Here are some points to be made on the phase III clinical trial design of DCVax-L.

Full enrollment may be reached in 1H, 2014, and topline results will be available perhaps 3 to 5 months after full enrollment. Both time points are hard to be precise on. The primary endpoint of the trial is median progression free survival ((PFS)) and the key secondary endpoint is median overall survival ((OS)). The Company has designed and powered the Phase III trial so that it only needs to show one-third as long as the 18.3 months extension of PFS as was seen in the Company's Phase I/II trials to be a successful trial.

The Company hasn't disclosed the p value that would result from the 312-patient size of its Phase III trial if the difference in median progression free survival is six months, as the powering assumes. My guess based on a look at the size and powering seen in other cancer drug trials is that, if obtained, this would produce a two sided p value of about 0.02 or a one-sided p value of about 0.01.

There will be one or more interim looks in 2013 at the data from the Phase III trial, looking for safety and efficacy, by a Data Monitoring Board. Such examinations are part of the statistical plan approved by the FDA; this is part of all cancer drug trials. The DMB is first and foremost concerned with safety. However, it also performs statistical analysis on efficacy and comes up with one of three recommendations: (1) the data shows that the drug is so effective that it is unethical to withhold the drug from control patients and the trial should be ended and control patients should be switched to DCVax-L, (2) the trial is unlikely to be successful and it is futile to continue, and (3) the trial should continue. My expectation is that the DMB at these interim looks will recommend that the trial continue."

http://seekingalpha.com/article/1221961-northwest-biotherapeutics-my-rationale-for-having-a-buy-recommendation?source=yahoo

Imagine what it would do with the price per share when the DMB of the FDA gives NWBO the score (1) in June: HEAVEN!!!

I would like to quote another article as well:

Northwest Biotherapeutics, Statistically Speaking

"In the past few months I have read a lot of negative comments and opinions on Northwest Biotherapeutics (NWBO) regarding their company history, data, CEO and the potentially ground breaking new product DCVax -L. One particular article where one author, Adam Fuerstein, was particularly critical of the data from NWBO's DCVax-L Phase II results, claiming that "Northwest Bio has the chutzpah to claim the benefit conjured up in this ginned-up survival analysis is statistically significant." As such, I decided to pull out the old Statistical handbook, and delve into this a bit more.

First off I used the data provided on the recent company presentation on the Phase II results for 20 patients using DCVax -L compared to 119 patients using the Standard of Care (SOC) for treating Gliobastoma Multiforme (GBM). Now here is where much of the criticism begins in that there is no control to properly compare the DCVax treatments with. Furthermore, Adam F. criticizes that comparing the DCVax results to a different sample set is a "grinned up ... analysis". Well, one rather intuitive statistician, Frank Wilcoxon would vehemently argue that fact, mainly because he developed a method to compare two independent populations, the Wilcoxon Rank Sum Test. More importantly, it was used for Non-normal Distributions, which is exactly what we see with both the 119 SOC treated patients as well as the 20 DCVax-L treated patients. So let's start at the beginning, with the data:


From this graph, we have all data points, (and yes it took me a long time to interpolate all these values). From both sets of data we get mean (average) values for both populations (Surviving DCVax patients were given the final survival rate of ~123.48 months to be conservative).

µSOC = 24.33 months, sDCV = 18.15, nsoc = 119 patients

µDCVax = 47.63 months, sDCV = 35.13, nDCV = 20 patients

The difference between the median values listed on the graph and the mean values calculated above is that the mean is the average, where the median value is the middle survival length, MSOC =17 and MDCV = 36.4 months. The average survival rates are actually greater than the median values, which also provides a good indication that the distribution is not normal. Another side note of information, is that the National Brain Tumor Society states a median survival rate of ~15 months; 2 months less than the data provided for the comparison SOC treated patients (which adds more conservatism to NWBO's comparison case). So now, let's prove that these populations are not normally distributed by taking the frequency of the data to produce a Histogram of the Standard of Care data below.

As we can see from the histogram, the mound is concentrated between 7 to 13 months, with a long tail of values in the upper region. We know this is the case for the DCVax patients as well, with patients still living. More so this is commonly observed on distributions for treatment and reaction studies. Now we must use a nonparametric test to compare these two samples, so we will use the famous Wilcoxon Rank Sum Test (famous in terms of Statisticians).

As such, a nonparametric statistical test must be used to evaluate and compare these two populations. The Wilcoxon Rank Sum Test for Large populations (n1 > 10, n2 > 10) would provide a robust method to compare these two mean values.

Setting up the hypothesis test we get:

One-Tailed Test

Ho: D1 & D2 are identical

Ha: D1 is shifted to the right of D2

Where D1 and D2 are the DCVax Treated and Standard of Care Distributions respectively.

Ranking each of the samples of both sample sets and summing the rankings of each set, we get the following:

T1 = 1964 = Summed Rank for DCVax Samples

T2 = 7766 = Summed Rank for Standard of Care Samples

Now since n1 > 10 and n2 > 10, we are able to use the Wilcoxon rank sum test using the Z-Test and the normal distribution probabilities.

We use the following equation for the test statistic:

Test Statistic z = Wilcoxon Equation

Now we can solve for the probability that these two distributions and ultimately their mean values are the same, by converting the Z-value of 3.3846 into a p-value of 0.000356. What does this mean in Adam F. terms? It means that there is a probability of 0.0356% that the 20 patients that received the DCVax vaccine had no increased survival due to the vaccine, that it was just amazing luck, or NWBO was able to pick 20 of the right patients. More so, it would be difficult for NWBO to choose the youngest patients (as Adam F. alleges) as the average age of a GBM patient is 64 years old.

As you can see in the graph that NWBO provided, the p value is 0.0003 rather than the 0.000356 which I calculated, however, I used several conservative assumptions such as the living DCVax survival rates which would easily account of 0.000056 difference. Furthermore this calculation does reproduce the statistical significance of NWBO's Phase II results comparison in layman's terms and provides some more insurance that, as opposed to said author's distrust of this company, the statistical analysis of this data was not grinned up, and pulled out of the air, kind of like many of the accusations certain authors like to produce. Most Phase II trials hope to achieve p values of 0.05 or less, providing enough confidence for further Phase III studies. However, with a p-value as low as 0.000356, DCVax-L is providing some truly significant results. Couple this with the fact that they are in the midst of a Phase III trial, with production facilities in both Europe and in North America, the company seems poised to do what very little Biotechnology companies do, succeed."

http://seekingalpha.com/article/1336331-northwest-biotherapeutics-statistically-speaking?source=yahoo

[DewDiligence]

Recent Biotech Buyouts of Publicly Traded Companies

[Added ACT-WCRX.]

 
 Acquired         ‡Premium   *Deal        iHub  
 Company  Buyer   to Market  Value  Date  Reference  
 GNLB     GSK       465%     $57M  10/08  #msg-33209281 
 MEMY     Roche     319%     $50M  11/08  #msg-33787598 
 ANDS     Roche     256%     $220M 10/11  #msg-68043946 
 SYNB     PFE       240%     $10M  12/10  #msg-58221573 
 KOSN     BMY       233%     $190M  5/08  #msg-29647147 
 MGRM     LH        171%     $155M  6/09  #msg-38960958 
 COLY     PFE       167%     $165M 11/07  #msg-24600805 
 INHX     BMY       163%     $2.5B  1/12  #msg-70636307 
 CYPB     Ramius    160%     $255M 12/10  #msg-57780859 
 NTMD     Deerfld  z158%    z$36M   1/09  #msg-35132470 
 ICGN     PFE       150%     $56M   7/11  #msg-65365128 
 EYE      ABT       149%     $2.8B  1/09  #msg-34762429 
 IOMI     Intercell 147%     $190M  5/08  #msg-29232165 
 CPEX     FCB Hldgs 142%     $77M   3/11  #msg-61326856 
 BTRX     Stiefel   136%     $150M  6/08  #msg-30201906 
 ISTA     Bausch&Lm 134%     $500M  3/12  #msg-73708628 
 SOMX     PTX       127%     $25M  12/12  #msg-82334111 
 Tepnel   GPRO      126%     $132M  1/09  #msg-35221710 
 ADLR     CBST      121%     $190M 10/11  #msg-68264754 
 SGXP     LLY       119%     $64M   7/08  #msg-30547648 
 ENCY     PFE       118%     $350M  2/08  #msg-26978155 
 TRCA     Ipsen     104%     $660M  6/08  #msg-29795183 
 AMLN     BMY       101%    u$7.0B  6/12  #msg-77122453 
 HGSI     GSK        99%     $3.0B  7/12  #msg-77532608 
 CRY.to   MDT        97%     $380M  9/08  #msg-32421462 
 Speedel  NVS        94%     $880M  7/08  #msg-30588524 
 MNT      JNJ        92%     $1.1B 11/08  #msg-33879830 
 MEDX     BMY        90%     $2.1B  7/09  #msg-39801273 
 VRUS     GILD       89%     $11B  11/11  #msg-69211700 
 SIRT     GSK        85%     $620M  4/08  #msg-28705020 
 ZGEN     BMY        84%     $885M  9/10  #msg-54152162 
 YMI      GILD       81%     $510M 12/12  #msg-82377008 
 ORIDN.SW COV        77%     $300M  4/12  #msg-74079493 
 CVTX     GILD       76%     $1.4B  3/09  #msg-36225695 
 MOVET.BR Shire      74%     $560M  8/10  #msg-52918245 
 IDEV     ENDP       74%     $370M  1/09  #msg-34592416 
 LEVP     VPHM      y73%    y$510M  7/08  #msg-30704409 
 TARG     MDCO       72%     $42M   1/09  #msg-34774402 
 Ventana  Roche      72%     $3.4B  1/08  #msg-30912677 
 Jerini   Shire      71%     $520M  7/08  #msg-30452872 
 APNO     Cell Bio   70%     $20M   9/09  #msg-43348606 
 AAH.AX   CEPH       69%     $207M  2/09  #msg-35956544 
 DDS.TO   PLB.TO     68%     $15M   8/11  #msg-66272770 
 OSTE     MDT        65%     $123M  8/10  #msg-53410183 
 TLCR     Grifols    64%     $3.4B  6/10  #msg-50961841 
 FACT     ABT        64%     $450M  3/10  #msg-47606240 
 Acambis  SNY        64%     $550M  7/08  #msg-30990498 
 JAV      HSP        64%     $141M  4/10  #msg-48881292 
 Synthes  JNJ        61%     $21.5B 4/11  #msg-62473819 
 SCRX     Shionogi   61%     $1.4B  9/08  #msg-31859174 
 MAPP     AGN        60%     $958M  1/13  #msg-83696395 
 BFRM     Merz       60%     $253M  1/10  #msg-45071380 
 CXS.AX   CEPH       59%     $163M  3/11  #msg-61453144 
 CRXL     JNJ        58%     $2.4B 12/10  #msg-57504349 
 OMPI     VRX        56%     $360M  3/13  #msg-86332513 
 BMTI     WMGI       56%     $380M 12/12  #msg-81626598 
 MTXX     HIG Captl  56%     $75M  12/10  #msg-57778844 
 ASPM     COV        56%     $210M  9/09  #msg-43348479 
 OSIP     Astellas   55%     $4.0B  5/10  #msg-50234451 
 IDMI     Takeda     55%     $75M   5/09  #msg-37898204 
 GNOM     BGI-Shnzhn 54%     $118M  9/12  #msg-79636464 
 RDEA     AZN        54%     $1.3B  4/12  #msg-74706626 
 BSMD     MMSI       54%     $96M   5/10  #msg-50161877 
 ATSI     MDT        54%     $370M  4/10  #msg-49617936 
 ALO      KG         54%     $1.6B 11/08  #msg-33763449 
 MEDI     AZN        53%     $15.2B 4/07  #msg-19020387 
 MLNM     Takeda     53%     $8.8B  4/08  #msg-28365383 
 TRBN     EBS        52%     $97M   8/10  #msg-53271836 
 SYNO     BAX        52%     $260M 12/11  #msg-69906294 
 PCOP     LGND       52%     $75M   9/08  #msg-32404474 
 CLZR     ELOS       51%     $65M   9/09  #msg-41293512 
 OMRI     JNJ        51%     $465M 11/08  #msg-33762745 
 IMCL     LLY        51%     $6.5B 10/08  #msg-32662830 
 MYOG     GILD       50%     $2.5B 10/06  #msg-13712121 
 MIL      Merck KGaA 50%     $7.2B  3/10  #msg-47249493 
 CRGN     CLDX       50%     $40M   5/09  #msg-38262967 
 BEC      Danaher    46%     $6.8B  2/11  #msg-59624646 
 PHRM     CELG       46%     $2.9B 11/07  #msg-24645394 
 CALP     PKI        42%     $600M  9/11  #msg-66915400 
 BRL      TEVA       42%     $9.0B  7/08  #msg-30792830 
 VITA     SYK        41%     $320M  5/11  #msg-63178312 
 AGAM     STJ        41%     $1.3B 10/10  #msg-55673504 
 KG       PFE        40%     $3.6B 10/10  #msg-55425514 
 MRX      VRX        39%     $2.6B  9/12  #msg-79186818 
 CEPH     TEVA       39%     $6.8B  5/11  #msg-62636692 
 ORCH     LH         39%     $85M   4/11  #msg-61801828 
 MOGN     Eisai      39%     $3.9B 12/07  #msg-25163775 
 LIFE     TMO        38%     $15.6B 4/13  #msg-86836458 
 DUSA     Sun Pharma 38%     $230M 11/12  #msg-81273572 
 PRX      TPG (prvt) 37%     $1.9B  7/12  #msg-77533202 
 MTOX     LH         37%     $240M  6/12  #msg-76240732 
 GENZ     SNY       v37%    v$20.1B 2/11  #msg-59975091 
 MATK     Royal DSM  35%     $1.1B 12/10  #msg-57987049 
 WCRX     ACT        34%     $8.5B  5/13  #msg-88088454 
 AMMD     ENDP       34%     $2.9B  4/11  #msg-61948007 
 CLRT     GE         34%     $580M 10/10  #msg-55864640 
 SGP      MRK        34%     $41B   3/09  #msg-36140327 
 HTRN     ENDP       34%     $223M  5/10  #msg-49838813 
 KNSY     Royal DSM  33%     $360M  5/12  #msg-75204020 
 MITI     AMGN       33%     $1.16B 1/12  #msg-71341339 
 SMTS     COV        32%     $250M  6/10  #msg-51344183 
 TOMO     ARAY       31%     $277M  3/11  #msg-60697854 
 PPDI     CarlyleGrp 30%     $3.9B 10/11  #msg-67625255 
 OctoPlus RDY        30%     $35M  10/12  #msg-80752228 
 CGPI     Galderma   30%     $420M  2/08  #msg-28286522 
 WYE      PFE        29%     $68B   1/09  #msg-35077617 
 APPX     Fresenius  29%     $940M  7/08  #msg-30498388 
 CRA      DGX        28%     $330M  3/11  #msg-61103240 
 SEPR     Dainippon  28%     $2.6B  9/09  #msg-41143301 
 ALTH     SPPI       27%     $108M  4/12  #msg-74081029 
 GXDX     NVS        27%     $330M  1/11  #msg-59092015 
 ISPH     MRK        26%     $430M  4/11  #msg-61724403 
 Zentiva  SNY        26%     $2.6B  9/08  #msg-32327005 
 ZOLL     AsahiKasei 24%     $2.2B  3/12  #msg-73194976 
 NOVN     Hisamitsu  22%     $428M  7/09  #msg-39515681 
 DNEX     TMO        21%     $2.1B 12/10  #msg-57686719 
 CPTS     Bayer      20%     $1.1B  4/13  #msg-87353545 
 PBTH     OPK        20%     $480M  4/13  #msg-87185863 
 GPRO     HOLX       20%     $3.7B  4/12  #msg-74999864 
 CLDA     FRX        19%     $1.2B  2/11  #msg-60171753 
 PPCO     ENDP       19%     $168M  8/10  #msg-53137069 
 EVVV     COV        19%     $2.6B  6/10  #msg-50797343 
 KCI      Apax Prts  17%     $6.3B  7/11  #msg-65162696 
 ABII     CELG       17%     $2.9B  6/10  #msg-51844360 
 ACL      NVS       x17%    x$49.7B 1/10  #msg-45072999 
 PRXN.L   Upshr-Smth 16%     $350M  6/12  #msg-76556065 
 CGRB     JNJ        16%     $970M  5/09  #msg-38039851 
 DNA      Roche      16%    w$46.8B 3/09  #msg-36224175 
 ARI.to   Roche      15%     $190M  7/08  #msg-30904056 
 SENO     BCR        14%     $213M  5/10  #msg-49838776 
 EURX     Axcan       9%     $583M 12/10  #msg-57543845 
 PMTI     CYNO        8%     $294M  3/13  #msg-85810217 
 CEGE     BPAX        6%     $38M   6/09  #msg-39163410 
 MEND     JNJ         6%     $480M  7/10  #msg-52176337 
 PRON.OL  BASF        4%     $844M 12/12  #msg-81711876 
 VXGN     OXGN       (4%)    $33M  10/09  #msg-42578130 
 AVGN     MNOV       (7%)    $38M   8/09  #msg-40769841 
 VRX      BVF        (7%)    $3.9B  6/10  #msg-51505172 
 NABI     Biota       ®        ®   11/12  #msg-81312718 
 TRMS     Synageva    ®        ®    6/11  #msg-64249161 
 PGLA     Avexa       ®        ®   12/08  #msg-34341452 
 NUVO     ARCA        ®        ®    9/08  #msg-32420015 
 NOVC     TSPT        ®        ®    9/08  #msg-31869987 
 VSGN     IPC         ®        ®    8/09  #msg-40603745 
  
 * Adjusted for cash/debt on acquired company’s balance sheet. 
  
 ‡ Relative to “unaffected” share price in cases where 
 a buyout offer or auction was made public; excludes 
 contingent values unless otherwise specified. 
  
 ® Reverse merger with private or non-US company.  
  
 u Includes $1.7B assumption of debt; premium relative to 
 3/27/12 close, when Bloomberg reported BMY bid. AZN pays 
 BMY $3.4B to put AMLN’s portfolio into 50/50 JV. 
  
 v Excluding CVR of $4-14/sh; premium relative to 7/22/10 close. 
  
 w For 44% of DNA not already owned. 
  
 x Price includes entire deal in three stages; 17% premium is the 
 blended avg price of NVS’ purchases ($164) relative to ACL’s market 
 price 4/4/08 immediately prior to announcement of first stage of deal. 
  
 y Includes $0.45/sh of contingent payments. 
  
 z Liquidated by Deerfield following failed merger with Archemix.