Northwest Biotherapeutics, Inc (OTCMKTS:NWBO) a biotechnology company developing DCVax® personalized immune therapies for solid tumor cancers, today announced that yesterday it closed on the $7.5 million financing it announced last Friday, March 17, 2017.
When a company needs cash it is bad for common shareholders. This dilution always comes out in the share price, and the price action in Northwest Biotherapeutics is expected and predictable. A look at any 1 year chart (see below) shows the path as clear as day, the stock was +30% for the year and once the dilution was processed investors scrambled sending shares down -30% for the year. The common stock holder is always the recipient of the negative price action when the company needs money. The banker is often viewed as the black hat in the movie, but they are performing a function needed by microcap players. Few understand the shark tank nature of investing and funding smaller companies in 2017 capital markets.
Northwest Biotherapeutics, Inc (OTCMKTS:NWBO) sold to several institutional investors securities totaling 28,843,692 shares, comprised of 18,843,692 common shares at $.26 per share, and 10,000,000 shares of Class C Warrants pre-funded at the closing at $.25 cents per future exercisable shares, with a one cent per share additional payment to be made at the time of actual exercise of these warrants. This arrangement is to enable investors to avoid exceeding 4.99% ownership while still funding $7.5 million.
Additionally, the investors received five year Class A warrants to purchase up to approximately 21.6 million shares of common stock with an exercise price of $0.26 per share. They also will receive three month Class B warrants to purchase up to approximately 21.6 million shares of common stock with an exercise price of $1.00 per share. These are the payoffs for the bankers for completing the deal and the final product for funding.
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NWBO 1 year chart below.
A clinical hold on phase 3 trials for a brain cancer immunotherapy candidate from Northwest Biotherapeutics Inc. was recently lifted by the U.S. Food and Drug Administration which is the fundamental action driving all of the restructuring. The Bethesda-based company is working to develop products to stimulate the human immune system to reverse tumor growth and kill cancer cells and has several human clinical trials underway. The trial in question, DCVax-L, is for for glioblastoma multiforme brain cancer.
The company was 17 patients shy of its planned 348-patient trial when the FDA closed enrollment in 2015. Patients in the trial were allowed to continue being treated.
Despite the lifting of the hold, Northwest Bio said it doesn’t plan to reopen enrollment since it was able to accumulate a sufficient number of events toward measuring progression-free survival and expects to have enough data endpoints for overall survival within the next several months. The company has previously said it would not be “worth the time it would take” to restart enrollment.
It’s positive news for the company which has had a tumultuous couple of years. Most recently, the company voluntarily delisted its stock from the Nasdaq Capital Market in December. It came after the exchange notified the company that it no longer met requirements for listing. This is not that unusual really – many companies are notified by the exchanges to meet requirements, so it is not the death knell it seems, and for Northwest Biotherapeutics (OTCMKTS:NWBO) the shareholders feel like it is safe to go back in the water. For continuing coverage on shares of $NWBO stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!