For months, shareholders in Northwest Biotherapeutics (OTCMKTS: NWBO) have been speculating on the message boards about the timing of the release of the top-line data from the phase 3 DCVax-L for Glioblastoma multiforme brain cancer (GBM) trial in newly diagnosed glioblastoma patients.
On October 5th, 2020 the company announced their data lock and put language in their press release about the steps they would need to accomplish in order to release the top-line data from their pivotal Phase 3 clinical trial.
The American Society of Clinical Oncology (ASCO) Annual Meeting will be held the week of June 4th – 8th, and all the clues from management suggest a release will come during the June ASCO meeting.
The typical timelines needed to accomplish the tasks that they spelled out in their last update and 10K filing seem to be in alignment with the meeting.
All breadcrumbs surrounding the drug development are clearly pointing toward a great top-line readout followed by an approval.
Northwest Biotherapeutics Presenting at ASCO
At this point in time, the company has said nothing about its plans to attend ASCO. It may be premature to speculate in advance of the meeting, but it’s pretty obvious that in general development stage companies use ASCO as a forum to update their cancer research. The last time they presented at ASCO was in 2019, but they also presented in 2018 and 2017—so it appears they only skipped ASCO during the pandemic lockdowns, which was held virtually any way.
In each of these instances, there were only a couple days of warning going into the presentation which means that investors are potentially a month from a major inflection point. It’s very reasonable to expect an ASCO update and the timeline given at the time of their data lock in October seems to confirm that. NWBO is not a company that generates a lot of press releases. They are very conservative so it’s important to parse each and every word.
From their October 5th press release they said:
“The statisticians will proceed as quickly as possible with analyses of the raw data and prepare summaries of the Trial results for review by the Company, the Principal Investigator, the Steering Committee of the Trial, the Scientific Advisory Board, and a panel of independent brain cancer experts, who will analyze the data with the statisticians in preparation for public announcement and scientific publication.”
The key phrase was “in preparation for public announcement and scientific publication.” They will be announcing it in a public forum and ASCO represents the biggest stage there is in oncology.
Insulating Investors From STAT News
Adam Feuerstein has made it a habit to attack companies after a top-line data readout. It is clear through his tweets that he is planning another attack, and NWBO is in its crosshairs.
It has become clear to most that follow the biotech stocks that Feuerstein represents a proxy for the short sellers. His game is to obscure the truth and in order for that to work he needs to rapidly take company statements out of context and spin them negatively. His favorite line is “failure to meet the primary endpoint”.
The irony is that he’s right most of the time because it’s almost impossible to design a perfect clinical trial, and because the nature of clinical research involves the readouts of studies that fail to meet their primary endpoint, regardless of whether they show benefits for patients that are statistically significant or not. The thing that most investors miss is that just because a drug may fail an endpoint doesn’t necessarily mean the drug will not ultimately get approved.
What if the company met a secondary endpoint included in the statistical analysis plan (SAP) that would lead to approval?
Feuerstein’s strategy is to play on investors’ fears that something is dramatically wrong that will not lead to approval. The other game that Feuerstein plays is to plant a seed in investors’ heads that another trial will be needed and that more patients will need to be recruited. This plays on investors’ fears that the company will need to dilute shareholders by issuing more shares to raise more money and push the timeline for approval out into the future.
It seems that NWBO’s strategy is to neutralize Feuerstein dead in his tracks by getting the narrative of approval out before he can parse any of the data as being negative. The data is expected to be extremely positive when looking at the unblinded results compared to historical.
Feuerstein has consistently been dead wrong about this company.
Look at his tweet on October 5th, 2020 when the stock was at $0.75, it roughly doubled from that point. The icing on the cake was on February 15, 2018 when STAT’s hit piece complained about the company’s lack of transparency being a thing to worry about when the real problem was that not enough people were dying in the trial to stop it due to the strong survival benefit. The stock was $.33 when Feuerstein released the hit piece.
Rationale for Positive Readout from Northwest Biotherapeutics
When trends can be drawn from unblinded data that show a difference over the historical response it typically means the data is going to be good. Since their trials primary endpoint is a survival benefit they were waiting for the 223rd death to hit in their 331 patient trial.
The good news is that this took much longer than expected and the bad news is that it took much longer than expected, which ultimately delays the approval process, but raises the likelihood that the drug works.
The interim blinded data showed a very good survival benefit because the average historical survival of a newly diagnosed GBM patient is only 14 – 16 months yet in the interim readout the study showed a median survival of 23.1 months which is on the entire data set of 331 patients.
Investors need to keep in mind that 99 patients are in the control which represents about 30% of the patient population. For years the company was waiting for 223 people to die in the study and they only had 99 were in control which means they would need at least 124 deaths in the active arm assuming all perished in the control but there was one problem with the study design that likely contributed to the long trial. It allowed for a crossover of patients into the active arm should they get a recurrence.
By the end of the trial, 90% of clinical trial participants received the treatment. Impatient investors seemed to forget about the effect that the crossover patients could have on the length of trial if the treatment was very effective.
It’s a very sad statistic but only 25% of patients survive through one year and only 5% of GBM patients survive more than 5 years. This means that this trial should have had a readout years ago. Based on statistics, the trial should have had over 315 deaths 1.5 years ago, but it appears that the therapy works and is clearly prolonging survival and not by a little, but by a lot. This bodes well for approval.
“The survival rate is quite remarkable compared to what would be expected for glioblastoma. The 20 to 30 percent of long-term survivors in immunotherapy clinical trials are the people in whom we think there may be a particularly strong immune response against their cancer that is protecting them from getting tumor recurrence.”
In her journal article, she made the point that 30% of the people in the still-blinded trial survived for at least 3 years in comparison to the standard of care that only saw 25% survival in 1 year. The 3-year survival percentage is considerably higher than the 1-year survival for this disease so there is clearly a reason to be optimistic.
The final nugget of data that cements the case that the drug works is based on the DCVax-Direct trial. DCVax-Direct is very similar to DCVax-L. The primary difference is the injection site in the arm versus the head.
In their phase 1 study, they compared actual survival to prognostic survival and found out that 76% of patients exceeded their predicted survival time by an average of 14.3 months. Considering that the survival benefit is only 14 – 16 months this represents almost a doubling of survival in the crudest analysis using the same technology.
Manufacturing is going to be a very important part of this approval process because DCVax-L has the potential to be the first major rollout of a truly personalized medicine that will be manufactured specially for each individual. In August 2020 they raised $5.0 million of debt. This was followed by their announcement of a phase 1 buildout of their clean rooms and cyrostorage facilities that were supported by a Department for Business, Energy & Industrial strategy loan for $4.6 million.
Their manufacturing efforts culminated with an announcement in September to acquire Flaskworks so they could scale up production volumes and reduce production costs that have made other cell therapies like CAR-T so expensive. The confidence to invest in manufacturing and getting the buy in from investors and local municipalities is in part due to the strength of the unblinded data.
These are the breadcrumbs that point to a very positive report likely to lead to regulatory approval of the drug. Approval of this drug will also validate the manufacturing process that will allow for expansion as a platform technology.
Merck (NYSE: MRK) built Keytruda into a cancer immunology platform drug from just one approval. NWBO might be in a position to do the same unless of course they are taken over by one of the big pharmas.
DCVax-L represents one of the first truly personalized medicines for cancer. A portion of the tumor is resected and the master immune cells present in the tumor, which are called dendritic cells, form the basis of the therapy. The way it works is that white blood cells are collected from the donor patient and processed to separate out the target dendritic cells and then growth factors are added to force the cells into the immature state before the dendritic cell culture from the tumor is introduced.
Once the dendritic cell culture is introduced it basically trains the rest of the dendritic cells with a homologous mix of antigens to go after specific tumor cell types. This process of developing a personalized vaccine is extremely safe since it uses the patient’s own immune responses, directed by the dendritic cells. These cells are taken from a patient, expanded, trained to kill multiple types of cancer cells, and then put back into that same patient, so safety is a function of “how many cells is too much,” much like CAR-T therapy.
Speaking of which, many may have heard of Chimeric Antigen Receptor T cell (CAR-T) therapies that target only the primary antigen of a tumor, or an antigen-specific to the type of cell that is cancerous, such as CD19 on B cells. Companies like Gilead Sciences (NASDAQ: GILD) have spent close to $10 billion on these therapies and have run into a number of problems when it comes to recurrence.
Others in the space like Abbvie (NYSE: ABBV), Adaptimmune (NASDAQ: ADAP), Anixa Biosciences (NASDAQ: ANIX), Bluebird Bio (NASDAQ: BLUE), Fortress Bio (NASDAQ: FBIO), Pfizer (NYSE: PFE), and Sorrento (NASDAQ: SRNE) are developing programs that target one or two of the most common antigens but they too are having issues. Many of these therapies require an elimination of the immune system so that it can be replaced with the modified CAR-T immune system which in many cases causes the cytokine storm that many are suffering through with COVID-19.
Once DCVax-L is injected back into the patient, these dendritic cells will train T helper cells and cytotoxic CD-8+ cells to attack the cancer. The idea is that no cancer is homogenous and is actually a mix of different cancer cell types and the reintroduction of the dendritic cells trains another army of T-cells to stimulate an immune response to the cancer.
The primary purpose of this therapy is to eliminate the tumor escape with results in a recurrence. This is a very good therapy but it’s not perfect because tumor escape is a big problem that could be handled in combination with other drugs like leronlimab which is manufactured by CytoDyn (OTCMKTS: CYDY) which has a treatment to stop the spread of cancer with their monoclonal antibody called leronlimab.
However cancer’s biggest defense mechanism is still T-cell anergy and the Myeloid Derived Suppressor Cells (MDSC’s) in the Tumor Microenvironment (TME) due the improperly polarized Dendritic Cell.
Galectin Therapeutics (NASDAQ: GALT) recently published a journal article about how its galectin inhibitor Belapectin was able to overcome the T-Cell anergy and the suppressor cells that cool down the immunological response. DCVax-L in conjunction with one or more of these other drugs might even have a more pronounced effect including drugs like Keytruda and with its block of the checkpoint blockade.
The primary treatment for GBM is surgery followed by radiation and chemotherapy called temozolimide which is a drug manufactured by MRK. In certain instances Avastin, a drug that is manufactured by Genentec a subsidiary of Roche Holdings (OTCMKTS: RBBHY) is used to limit the blood supply to the tumor. The Avastin regimen wasn’t approved until 2014.
The only company close in terms of their mechanism of action that uses autologous cells which are immune cells from the patient is Marker Therapeutics (NASDAQ: MRKR). Their process is called MultiTAA and they too have a close loop of culturing the patients T-cells that are done outside the body and then infused in the patient. They are primarily targeting blood cancers and not solid tumors like NWBO.
Diffusion Pharmaceuticals (OTCMKTS: DFFN) has developed a molecule called DFN-529 which has completed 2 phase 1 trials in GBM. This molecule is a phosphoinositide 3-kinase (PI3K)/ AKT / mechanistic target of rapamycin (mTOR) pathway inhibitor that is involved in the control of the cell cycle signalling of cancer proliferation. Kazia Therapeutics (NASDAQ: KZIA) also has a PI3K inhibitor called Paxalisib which was developed by Genentec. Their phase 2 trial showed a median Progression Free Survival (PFS) of 8.4 months which really isn’t that good in comparison to NWBO. Overall survival was 17.7 months which is in line with the current standard of care which is 14 – 16 months given the n=9.
Northwest Biotherapeutics Investment Summary
Northwest Biotherapeutics is a battleground stock and is top on Adam Feuerstein’s hit list only second to CytoDyn Inc. (CYDY) who holds the record for consecutive Feuerstein attacks. NWBO’s history dates back to 2014 when Feuerstein made false claims about their interim analysis. There is a large short interest of 18.9 million shares with 6.59 days to cover, but this pales in comparison to the naked short position that could be forced to cover once the readout is unveiled. Ahead of the readout the company maintains a $1.2 billion market capitalization.
Should their cancer indication meet its primary endpoint it could very well become the standard of care (SOC) which means it could dominate the estimated $1.8 billion worldwide market. Beyond glioblastoma, this is a platform technology that could be effective at treating other forms of cancer and be one of the first truly personalized medicines that could be worth billions.
Just recently Brooklyn ImmnoTherapeutics (NYSE: BTX) announced that it acquired the license for a gene-editing technology for $1.0 million which increased the market cap to over $2.0 billion even though their first phase 3 trial isn’t expected to be completed until 2025. This sector of biotech is hot and investors seem eager to flock to a drug that is on the cusp of approval and has a monster-naked short position.
Northwest Biotherapeutics fits the profile and is headed toward a parabolic trajectory just like BTX. Many are saying that the BTX runup is part of the WallStreetBets movement, but they are denying involvement. What is clear is that NWBO seems to be well-positioned in the WallStreetBets crowd, and has garnered a following that seems to believe that Merck (NYSE: MRK) is going to acquire them.
Regardless of the rationale for price appreciation, the science behind the drug seems to indicate top-line data will be excellent and position them for approval.
As always, good luck to all (except the shorts)!
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