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Wednesday, October 28, 2020

Northwest Biotherapeutics, Inc (NASDAQ: NWBO) Sentiment Gets a Boost

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Northwest Biotherapeutics (NASDAQ: NWBO) in Bethesda, Maryland, is a clinical-stage biotechnology company that focuses on the development of personalized cancer vaccines designed to treat a broad range of solid tumor cancers.

The treatment involves altering a patient’s own immune cells to make them more effective at fighting tumors. Its most advanced treatment to date is for brain cancer, but it also is conducting early-stage research in ovarian cancer.

Northwest Biotherapeutics, Inc (NASDAQ:NWBO) shares are currently trading in the $0.60–$0.66 range. Its market capitalization is $73.06 million, and share prices have ranged from a high of $6.90 to a low of $0.32 over the past 52 weeks. Social sentiment is peaking, NWBO has a 95% positive sentiment score from StockTwits up from 66% in late July.
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The stock price suffered after reports surfaced late in 2015 of financial irregularities between Northwest Biotherapeutics and entities related to company chairman and chief executive Linda Powers.

Powers claims the payments for services to these entities had been approved by the Northwest Biotherapeutics board, independently audited, and filed with regulators when needed.

In September, NASDAQ informed Northwest Biotherapeutics executives that it had accepted the company’s remediation plan to address its failure to comply with listing rules and that the company had regained compliance with NASDAQ rules.

During the DCVax-L Phase 3 brain cancer study and the Phase I/II clinical trial for all types of inoperable solid tumors, Northwest Biotherapeutics paid a substantial portion of Cognate BioServices’ invoices in restricted stock instead of cash. The shares were unregistered, despite contractual obligations to register them.

The payments in stock in lieu of cash enabled both clinical trials to proceed full speed from 2013–2015. Prior clinical trials during the 2008–2011 financial crisis had been suspended or reduced under similar circumstances.

Under the agreement with NASDAQ, Cognate had to return more than eight million restricted shares and warrants for nearly seven million shares to Northwest Biotherapeutics. In exchange, Northwest Biotherapeutics issued new warrants for 4.3 million shares at a higher exercise price to Cognate.

NASDAQ’s decision closed the matter with the exchange.

The stock price also took a hit when Northwest Biotherapeutics (NASDAQ: NWBO) announced last August a “temporary” halt to its lead program–a 348-patient Phase 3 trial in newly diagnosed Glioblastoma multiforme, the most aggressive and lethal form of brain cancer. It is considered an “orphan disease,” or one that affects only a small percentage of the population.

Northwest Biotherapeutics has been unable to enroll new patients into the study since suspending the trial, and without patients to complete enrollment, the study has been effectively shut down.

However, the company also is conducting a Phase I trial of its DC Vax-Direct vaccine to treat inoperable solid tumors, and in mid-September, Dr. Marnix Bosch, the company’s Chief Technical Officer, presented an updated and more detailed analysis of this trial.

The Phase I trial treated patients with multiple inoperable metastatic tumors who had failed as many as six different existing treatment regimens. The trial included 40 patients, with 39 evaluable, and covered more than a dozen diverse types of solid tumor cancers.

Dr. Bosch reported encouraging results to the SMi Cancer Vaccines Conference in London. The top 20 percent of patients have to date exceeded two years of survival and are still alive, while the top 30 percent–including those with pancreatic, melanoma, lung, ovarian, and sarcoma cancers–combined for an average survival of 26.7 months to date, compared with an average of expected survival times of 12.3 months.

These positive results, combined with the resolution of the NASDAQ investigation, should continue Northwest Biotherapeutics’ rebound from its precipitous stock price decline.

The stock price peaked at $12 per share in July 2015, and from September 2015–September 2016, it lost nearly 91 percent of its value. Over the past month, though, the stock price has gone up 89.44 percent.

The company currently has a negative book value, its current price-to-assets ratio of 1.34 is lower than its peer median of 1.78, and it currently posts relatively low net profit margins.

On the plus side, Northwest Biotherapeutics’ year-over-year change in revenues and earnings are better than the median for its peer group, and its return on assets has improved from below median to about median over the last five years.

One concern is that based on the company’s operating performance, it may not be able to take on additional debt at this time. The company announced last week that it had filed with the Securities and Exchange Commission for a mixed shelf offering of up to $150 million, there is indeed more to expect. For continuing coverage on NWBO and our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

 

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