Trend reversal appears to be in play, as Northwest Biotherapeutics, Inc. (OTCMKTS:NWBO) continues to bounce back after plunging to all-time lows late last year. The stock is already up by more than 50%, barely three months into the New Year.
Northwest Biotherapeutics is starting to live up to expectations as echoed in our last piece. With the stock consistently trading higher and closing at higher lows, it is becoming clear that the underlying long-term bearish run could be losing momentum.
On a close look at the chart above, it is clear that a close above the $0.40 handle will affirm the emerging uptrend. Above the key resistance level, the stock is likely to make a push for the $0.49 mark, which seems to be the next key resistance level.
A plunge followed by a close below the $0.26 level, on the other hand, could open the door for the stock to tank to the $0.21 handle, seen as a key support level.
Before we look at the primary driver behind the recent upward momentum, let’s first understand what Northwest Biotherapeutics does in pursuit of growth and shareholder value.
Northwest Biotherapeutics casts itself as a biotechnology company focused on the development of personalized immunotherapy products for treating cancer. The company boasts of a broad platform technology for developing DCVax dendritic cell-based vaccines.
The company is working on DCVax-Direct a product for the treatment of Glioblastoma multiforme, a type of brain cancer. However, concerns about what the future holds for the candidate drug has been a point of concern to investors, in the recent past.
Last year, Northwest Biotherapeutics, put on hold clinical trials on DCVax-Direct, under the unclear circumstances. The lack of clarity has not done the stock’s sentiments on Wall Street any justice, seen as one of the reasons why it is still considered a risky investment.
Northwest Biotherapeutics has been aggressive on the capital raising front, as it continues to tap the debt market in pursuit of additional working capital.
In December, the company completed a $12 million financing from new investors on the pricing of Series A Preferred Stock at $1.70 a share. Investors also received warrants for the purchase of additional shares with an exercise price of $0.22 a share.
“We are pleased to see a growing number of new investors becoming interested in our DCVax technology and its encouraging potential, and providing the majority of the largest financing, we have done this year. We are also grateful for our long-term, patient and loyal shareholder base, and their participation in this financing as well,” said CEO Linda Powers.
The $12 million offering followed yet another public offering carried out in September, where Northwest Biotherapeutics issued 8.75 million shares at a price of $0.20 a share. It also issued 5-year warrants for the purchase of an additional 4.375 million shares of common stock, pegged at $0.22 a share. Gross Proceeds from the offering totaled $1.75 million.
Favorable results and progress in ongoing lawsuits have been one of the key drivers of the stock price action in recent months, taking into consideration the uncertainty around DCVax development.
The company has been at the center of attention amidst allegations of misconduct and misrepresentation of data pertaining to ongoing clinical trials
Northwest Biotherapeutics has since inched a step closer to resolving four lawsuits reported in regulatory filings. The trials are yet to indicate any negative findings against the company, with one of the case already dismissed outright and in entirety.
The biotechnology company has since settled two other cases with the NASDAQ capital market on reaching an agreement on certain actions that need to be taken to enhance corporate governance practice. The remaining case could be settled on similar terms.
“Lawsuits like these can be a distraction from the important work of companies like ours. In my opinion, disposing of these cases is an important step forward in our vindication from the relentless and false campaign to discredit our science, our operations, and our ethics, and hopefully helps remove what have been delaying obstacles in our path forward,” said Powers.
According to the Chief Executive Officer, settlement of the lawsuits should allow the company to focus its resources on developing and providing promising vaccines to solid tumor patients.
What Next For Northwest Biotechnology
Northwest Biotherapeutics looks like a risky investment given the uncertainty around the development of its candidate drug DCVax for treatment of brain cancer. Until the company provides an update on the way forward, after initiating a hold on the enrollment of patients for the study, the stock should remain susceptible to price swings.
Price action, on the other hand, paints a completely different picture given that the emerging bullish trend that continues to gain momentum. Given the underlying long-term bearish run, the stock needs to close above the $0.40 mark to be considered a reversal play.
Disclosure: We have no position in NWBO and have not been compensated for this article.