NWBO: Great Progress Made to Advance DCVax-L and DCVax-Direct

Zacks Small Cap Research

By Grant Zeng, CFA

NWBO Reports First Quarter of 2013 Financials

On May 16, Northwest Biotherapeutics (NWBO) filed its 10-Q for the first quarter of 2013.

There was no revenue for the first quarter of 2013.

Research and development expense was $11.6 million for the three months ended March 31, 2013 compared to $3.6 million for the three months ended March 31, 2012. The increase was primarily attributable to the DCVax-Direct manufacturing and product development work, and the preparation costs for the launch of two clinical trial programs, in the US and UK, as well as expansion of the ongoing Phase III trial in the US, and increased manufacturing of DCVax®-L for the Phase III trial.

General and administrative expense included $1 million of cash expenses, and $1.5 million of non-cash charges (i.e. amortization of previously issued stock based compensation and restricted stock and warrants issued for services), for a combined total of $2.5 million for the three months ended March 31, 2013 compared to $2.2 million for the three months ended March 31, 2012. The slight increase in general and administrative expenses from the prior period is as a result of $0.9 million related to the issuance of restricted stock and warrants for public relations and investor relation services, offset by a $0.4 million decrease in stock based compensation expense.

Net loss was $ 14.4 million or $0.54 per share for the three months ended March 31, 2013 compared to a net loss of $10.2 million or $0.51 per share for the three months ended March 31, 2012.

At March 31, 2013, cash and cash equivalents totaled $0.4 million.

In April 2013, the Company entered into an agreement with one healthcare-dedicated institutional investor for a registered direct placement of $10.0 million of common stock at the closing market price of $3.90 per share. The number of shares of common stock issued was 2,564,103. The Company issued to the investor warrants exercisable for 1,025,641 shares of common stock. The Company also issued to the placement agent warrants exercisable for 128,205 shares of common stock. Net proceeds to the Company amounted to $9.2 million after deducting deal related costs. The warrants have an exercise price of $4.29 per share and are exercisable beginning six months after closing, with a term of five years.

Phase III DCVax-L For Brain Cancer Is Going Well

This Phase III trial of DCVax-L is for newly diagnosed Glioblastoma multiforme (GBM), the most common and most lethal form of brain cancer. The trial is well under way in the US, with 46 active sites at present, and is expected to enroll an aggregate total of 312 patients in the US and Europe.

On May 16, 2013, NWBO announced that Phase III clinical trial with DCVax®-L for brain cancer has been initiated at King's College Hospital in the UK. This is one of the first late-stage clinical trials in Europe with active immune therapies. Three other sites in the UK are also preparing to open.

NWBO has also been working on preparations for the clinical trial in Germany. On July 25, 2012, NWBO announced that manufacturing certification has been received from the German regulatory authorities for the clinical trial in Germany, which is the first step towards implementation of the Phase III trial in Germany. NBWO submitted the application to the German regulatory authority (the Paul Ehrlich Institute, or PEI) for approval of the Phase III trial. As of March 31, 2013, 24 clinical centers are in varying stages of preparations as trial sites in Germany. Also, in October, 2012, ten major hospital centers across Germany, including the key opinion leaders in brain cancer, all applied to the German healthcare system for reimbursement of DCVax-L for brain cancer. In addition, medical centers in other European countries have requested to be added to the trial.

Results Expected in 2013 for DCVax®-Direct Phase I/II Trial For Solid Tumors

In parallel with these developments in the Phase III DCVax-L brain cancer program, NWBO has been making arrangements to launch its DCVax-Direct program.

In November, 2012, NWBO entered into a Letter of Intent for a collaboration with Sarah Cannon Research Institute, which specializes in oncology and has a network of more than 700 physicians in the US and UK who see more than 75,000 new cancer patients per year.

The trial is expected to be launched in the second quarter 2013. Target patients for inclusion in the trial include patients with melanoma, pancreatic cancer, liver cancer and liver metastases from colon or other cancers. As is standard with this type of trial, the DCVax-Direct trial will not be blinded, and the results will be visible as the trial proceeds over the course of 2013.

The primary objectives of this two-part trial are to evaluate safety, dose levels and efficacy. The Part 1 stage of the trial involves dose escalation and confirmation. The Part 2 stage of the trial will focus on efficacy. The primary measure of efficacy will be regression (i.e., shrinkage or elimination) of the inoperable tumors.

This endpoint of tumor regression is a particularly important one clinically: once tumors are established, if they cannot be surgically removed, it is very difficult to stop their growth and their spread.  This endpoint is also important from a regulatory standpoint:  it is the endpoint used most frequently for FDA-granted accelerated approval.  Further, this endpoint is a rapid one:  typically, if tumor regression is going to occur, it is anticipated to be seen within a few months after treatment – far sooner than other clinical trial endpoints such as progression free survival (PFS) or overall survival (OS).

Colon cancer is the second leading cause of cancer deaths (after lung cancer), exceeding even deaths from breast cancer or prostate cancers. DCVax®-Direct offers an important potential new treatment option for colon cancer patients whose cancer has spread and is no longer operable. DCVax®-Direct is specifically designed to treat inoperable cancers in various tissues through direct injection into the tumors.  It can be injected into any number of tumors, and virtually any location in the body (with imaging guidance for interior tissues).

Through over 10 years of research and development, NWBO has developed a unique DCVax-Direct technology with potential for any solid tumors. DCVax-Direct uses the DCVax platform to activate DCs in a manner suitable for direct injection into solid tumors. DCVax-Direct is designed to treat cancer patients whose tumor tissue is not available as their tumors are considered to be inoperable. The patient’s dendritic cells are activated, but without addition of cancer antigens. The cells adhere to the plastic culture surface, which results in activation.

In multiple pre-clinical studies of various cancers in animals, direct injection of DCVax-Direct into some of the tumors in each animal resulted in complete clearance of all tumors in 80% to 100% of all of the animals in the various studies – both the tumors that were injected and the tumors that were not injected, indicating a systemic immune response.  Further, the tumors were cleared relatively rapidly: within weeks after the DCVax-Direct injections. Equally as important, sixty days after the tumors were cleared from the animals in these pre-clinical studies, the animals were re-injected with the same tumor cells that readily established tumors at the outset of the studies.  This time, tumors failed to establish, indicating immune memory.

Current treatments for solid tumors typically involve cytotoxic therapy aimed at killing tumor cells. Such treatments include radiation therapy, chemotherapy, or other cell killing treatments such as cryotherapy. These treatments can still be used along with DCVax-Direct as they can potentially prepare the tumor tissue for the injection of DCVax-Direct. The ability to still use conventional cytotoxic agents along with DCVax-Direct will enable DCVax-Direct to be adopted in the market without requiring any change of existing clinical practice if so desired.

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