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Expert Financial Analysis and Reporting

Northwest Biotherapeutics: Highlights of the 2014 10-K (NWBO, Buy, $7.81)


Northwest Biotherapeutics just issued their 10-K for 2014 and I would urge everyone to read it. The purpose of this note is to point out what I consider to be interesting pieces of information gleaned from the 10-K. Once a year, each Company publishes a 10-K and I think of the document as a research report being written by management. I have included significant sections, virtually verbatim, of the Northwest Biotherapeutics 2014 10-K. I have also included some of my own thoughts which are identified as SmithOnStocks comments.

I read through the document and decided to publish some parts that caught my attention. As with most emerging biotechnology companies, there are a number of scary sounding risk factors that are highlighted. These are the norm as this is a very high risk business. However, another aspect for Northwest is that this Company looked to be on the verge of bankruptcy in 2011 and was facing what seemed to be an impossible challenge of concluding a phase 3 trial of DCVax-L. This adds to the risk factors and complexity of the Company. It also was issued a going concern letter by its auditors this year which has been the case for the last few years.

At the end of 2011, the Company had $24,000 of cash (you read that right) and $54 million of liabilities. It faced enormous funding requirements and indeed the cash outflow in 2013 and 2014 were $38 million and $55 million. Raising capital was made extremely difficult by the very weak cash position and complex balance sheet. This financial weakness was a major factor in the Company being singled out as a key target for shorts. There are currently over 9 million shares shorted against the Company and perhaps 4 million naked shorts. In conjunction, the Company has been the subject of 21 attack articles by a blogger with a significant following in the last two years. The persistent pressure on the stock and persistent flow of attack articles have had a negative effect on investor psychology (as intended) and made it even more difficult to raise capital.

I think that most reasonable people in early 2012 would have been highly skeptical that the Company could survive and even more doubtful that it could conclude a phase 3 trial of DCVax-L. However, as we stand here today, the Company is on track to finish the phase 3 trial of DCVax-L in 1H, 2016. Amazingly, it has also finished a phase 1 trial of a second product DCVax Direct and will soon be starting two phase 2 trials for that product. Manufacturing is critically important for living cell therapies as the manufacturing process is the product. Northwest has now established a manufacturing capability in the US, Germany and the UK. Finally, management scored a major coup in gaining approval to market DCVax-L in Germany prior to completion of the phase 3 trial. They are also going through the unprecedented process of obtaining reimbursement in Germany before phase 3 trials are completed. They are also pursuing and are likely to achieve an early access approval in the UK.

I think that by any measure, the Company has made amazing progress in the last three years in the face of incredible odds. Very importantly, it has retained worldwide rights to its products. Investors often cheer when a Company concludes collaboration with a larger company to help it develop a product. This may de-risk the development process, but it often comes at the price of giving away half or more of all future profits. The retention of all rights to its products and an established manufacturing infrastructure gives the Company great flexibility and strong bargaining power if it does elect to partner its products or if it were to decide to sell the Company.

Now we are awaiting the results for DCVax-L and should see them in mid-2016. In the same time frame we may be seeing meaningful interim results for phase 2 trials of DCVax Direct, which in an optimistic case could be the basis for a regulatory filing. There can be no assurance that the results of these trials will be successful and lead to approval, but this is the case with all drug products in clinical development. However, management has accomplished the near impossible in getting the Company close to the finish line for viewing critical clinical data on these two products while retaining all product rights.

If you read the 10-K, you will find it very complicated as the Company has had to be extremely creative in funding itself. It has been very cash constrained and has been forced to lurch from one financing to the next. It never had the luxury of being showered with money from investors as has been the case with the CAR-T companies, Juno (JUNO) and Kite (KITE). In my opinion, if Northwest were a private company coming public today with the achievements I have referred to, it would be seen in the same light as those companies and money would not be an issue.

The company still has a strained balance sheet and will have to raise significant cash in 2015 in order to get to the point of being able to see critical clinical data for DCVax-L and DCVax Direct. However, the accomplishments of the Company finally have caught the notice of some prominent institutional investors, most notably Neil Woodford, a highly regarded UK investor. I am confident that the Company will have access to the financial resources on reasonable terms that will be needed to reach topline results for DCVax-L and DCVax Direct.

Clinical Trial Status of DCVax-L

DCVax-L is now in late stages of a 348-patient international Phase 3 trial. As of February 28, 2015, there were more than 60 clinical sites open and operating for the trial across the U.S. and in the U.K., Germany and Canada, with more sites expected to become operational during 2015, particularly in Europe.

The trial originally started just as the financial crisis began in 2008. It enrolled a limited number of patients at that time, and then suspended new enrollment. The trial resumed enrollment in the summer of 2011 at ten sites, all in the US. In 2012, the trial was approved by the U.K. regulatory authority to proceed in the U.K. In the fall of 2013, the trial was approved by the German regulatory authority to proceed there. In 2014, the trial was approved by the Canadian regulatory authority to proceed there as well. The Company plans to continue adding sites to the trial to prepare those sites for commercialization if the trial is successful. As of December 31, 2014, there were more than 60 clinical trial sites in operation in the US and Europe which compared to 50 clinical trial sites on December 31, 2013, almost all of which were in the US.

Northwest anticipates that the Phase 3 trial will reach its first interim analysis for efficacy during 2015. Various factors may affect the timing of completion of the trial, including the pace of adding more sites in Europe during 2015, and the pace of enrollment in Europe. They anticipate that the Phase 3 trial will reach its primary endpoint next year, potentially in the spring or summer.

SmithOnStocks Comment: This is the first time that I have seen such detailed information on trial sites and the progress in adding sites. At one point, investors were looking for the trial to complete in 1H, 2015 and the Company is now pointing to 1H, 2016. I believe that they did this purposely in order to get more European sites familiar with the drug. This can pay dividends in gaining much quicker uptake if the drug is ultimately approved.

Information Arm Paralleling the Phase 3 Trial

In parallel with the phase 3 trial of DCVax-L for newly diagnosed glioblastoma multiforme, the Company opened an information arm. There were 55 patients in the information arm who failed to meet the eligibility requirements for the phase 3 trial. Most of these patients (51 of the 55) were actual or potential “rapid progressors” (patients in whom the brain cancer is already appearing to re-grow by the time the patient finishes the 6 weeks of daily radiotherapy and daily chemotherapy following surgical removal of the tumor).

All of the 51 patients were treated with the same DCVax-L product as in the phase 3 trial, on the same treatment schedule as in the trial, at the same medical centers as in the trial, in the same time period as the trial, and the data were collected and maintained by the same Contract Research Organization (CRO) as is managing the trial. They plan to continue following these patients during this year, and plan to report on further results.

At least 19 of the 51 patients were confirmed as being clear rapid progressors, with such aggressive cancer that the brain tumors were already re-growing within weeks after the original surgery and during the daily radiotherapy and chemotherapy. Because progression of the cancer is the primary endpoint, these patients failed before they could be entered into therapy. The rest of the 51 patients could not be classified as clearly as these 19.

SmithOnStocks Comment: Chief Technical officer Marnix Bosch will be making a presentation at the Immunotherapy of Cancer Conference (ITOC) in Munich Germany on March 26, 2015. It will be an oral presentation and there will also be an abstract. Remember that oral presentations are reserved for the most important findings.

This paper presents data on these 19 patients. It states that median overall survival in this group was 15.1 months. This was not a controlled study, but the paper points to six other small studies that indicate expected median overall survival in this type of patient would be expected to be 8 to 10 months. Remember that these patients are much sicker than those enrolled in the phase 3 trial. Those patients are newly diagnosed GBM patients while these are much sicker recurrent GBM patients. The hope would be that results in newly diagnosed GBM patients would be as good as or better than the results for these 19 patients.

The link to the abstract is

German Hospital Early Exemption Approval for DCVax-L

In March 2014, Northwest received approval from the German regulatory authority of a “Hospital Exemption” for DCVax-L for glioma brain cancers under Section 4b of the German Drug Law. This approval for DCVax-L was the first of its kind in a number of key ways, although the law had been in place for several years. Under this Hospital Exemption, Northwest may provide DCVax-L to patients for the treatment of any glioma brain cancers (both Glioblastoma multiforme, the most severe grade, and lower grade, less-malignant gliomas), and both newly diagnosed and recurrent stages of disease, outside of the Phase 3 clinical trial, and charge full price for the product. The patients may be from Germany or elsewhere. This approval has a term of five years, and can be re-applied for and re-issued at the end of that period.

During 2014, the Company undertook preparations for this Hospital Exemption early access program (for which the parties would not engage until they had received regulatory approval) including numerous contract negotiations with medical centers, separate arrangements for international patients at the medical centers, development of a registry and system for data collection, obtaining local licenses, development of patient contracts and consent and release forms, logistics arrangements, and other steps. During 2015, they plan to continue these program development activities, undertake outreach activities, and gradually grow the program.

SmithOnStocks comment: Short sellers have tried to negate the importance of this validation of the promise of the DCVax-L by a major regulatory agency by stating that this is nothing more than a compassionate use program. Clearly, it is not. It is an effort by German regulators to get potentially life savings drugs to patients more quickly than going through the entire clinical process and regulatory review. DCVax-L was the first systemic drug to gain this approval.

German Reimbursement for DCVax-L

Also in early 2014, they received a determination from the German central reimbursement authority that DCVax-L is eligible for reimbursement on an extraordinary basis, even though it is still in clinical trials. The reimbursement must be negotiated with the German Sickness Funds (health insurance companies). One aspect of the process involves negotiations with hospitals to seek inclusion in overall budgets which the hospitals negotiate with the Sickness Funds. Another aspect of the process involves negotiation of individual patient cases, one by one.

During 2014, they undertook considerable work on pricing models, and began the process of hospital budget discussions and case by case discussions. They expect to continue these processes in 2015. Although these are labor intensive and lengthy processes, they believe it is highly valuable to have an opportunity to undertake these processes now, while DCVax-L is still finishing its clinical trials and prior to commercialization, as normally these processes can only be begun after full product approval has been received and commercialization has begun.

The reimbursement eligibility determination that they have received in Germany for DCVax-L product for brain cancer allows them to negotiate reimbursement arrangements, but does not ensure a positive outcome. They must negotiate with hospitals and multiple Sickness Funds in Germany. Reimbursement at the current stage of the DCVax-L program is extraordinary, and they do not have substantial precedents to refer to. DCVax-L product involves a different cost structure than traditional drugs and may require different reimbursement arrangements. The reimbursement arrangements also may be applied on a patient by patient basis.

SmithOnStocks Comment: It is this reimbursement feature that is so striking and unprecedented. However, from the above description, it is clear that this is a complex and time-consuming process involving multiple bureaucracies. Northwest also faced the situation that discussions needed to be conducted in parallel as publicly announced contract terms with one payor system would set the tone for others to come.

UK Early Access for DCVax-L

In the U.K., they also undertook early access program activities in 2014. In April, 2014, the U.K. government launched a new program for early access to innovative new treatments for serious unmet medical needs: the Early Access to Medicines Scheme (EAMS). The EAMS involves a 2-step process. First is a scientific evaluation by the U.K. regulatory authority of the new treatment and whether it is likely to offer a major advantage over existing treatments for a serious disease with high unmet medical need. If the evaluation is positive, it results in a “PIM” (Promising Innovative Medicine) designation.

DCVax-L for brain cancer went through this evaluation and, as they reported in September, 2014, DCVax-L became the first product to receive a PIM designation under the new EAMS program. The second (and final) stage of the EAMS involves a further Scientific Opinion and an evaluation of the manufacturing. The activities for 2015 include pursuit of the second (and final) stage of EAMS. Recently, the first EAMS approval was granted to Merck’s checkpoint inhibitor Keytruda, which is widely viewed as a breakthrough drug for cancer.

SmithOnStocks comment: I think that approval of Keytruda as the first drug to be approved under this program is a powerful validation of the promise of DCVax-L. DCVax-L could be the second product to receive the EAMS approval. I have no direct knowledge, but I think that reimbursement could be a hang up. The British National Health System is strapped for funds and DCVax-L could lead to significant spending. Reimbursement discussions could be complex.

Importance of Early Access Programs

The Company has consistently said in its public presentations, that it believes the most important value of early access programs lies in the regulatory validation involved, and the invaluable opportunity to practice for commercialization outside of clinical trials and before actual commercialization. The opportunity for some early revenues is also encouraging, but in their view is secondary.

SmithOnStocks comment: From the discussion on reimbursement, you can see how complex the reimbursement issues are. Without the early access programs, assuming that DCVax-L is approved reimbursement should be in place on day one of approval. This could save the Company many months of negotiations before it can begin selling DCVax-L. I think that some investors were expecting a quick and large ramp and are disappointed that there we have not seen significant revenues. I think that we could see revenues from Germany in the not too distant future.

DCVax Direct Clinical Status

In the second half of 2013 (August I think), Northwest launched the phase 1 stage of a 60-patient phase 1/2 clinical trial with DCVax-Direct for all types of inoperable solid tumor cancers. The trial took place at two sites: MD Anderson Cancer Center in Houston and Orland Health (formerly MD Anderson, Orlando).

As a first-in-man study of a new type of treatment, the DCVax-Direct trial had to proceed slowly for an extended period, treating only about one patient per month to check for any safety or toxicity issues until about March, 2014. There was strong interest in the trial, and once the pacing limitations were lifted, the trial proceeded quickly. Most of the total recruitment was completed between March and June, 2014, and a few excess patients were accepted in July and early August. For each patient, the manufacturing, quality control and product release took several weeks and then the treatment regimen lasted up to 8 months.

In spite of this heavy disease burden, though, the treatment regimen in this first clinical trial was very conservative: only one tumor was injected in each patient, and treatments were spaced as much as a month or two apart. This phase 1 trial was designed to be very informative. In this trial they are: treating numerous diverse types of cancers (sarcoma, pancreatic, colorectal, lung, melanoma and others); they are testing three different dose levels and two different formulations of the DCVax-Direct product; they are testing different methods of image guidance for the intra-tumoral injections (all of which have worked); they are collecting both imaging and biopsy data, and correlating them with clinical effects in patients; they are evaluating both local effects in the injected tumors and systemic effects in the non-injected tumors; they are evaluating potential endpoints for future trials; and most importantly, we are evaluating safety.

The experience to date with the phase 1 stage of the DCVax-Direct phase 1/2 trial is that (as has also been the case over the years with DCVax-L) the safety profile is excellent. The typical effects are that patients develop a fever after the injections, but only a couple of degrees and only for a day or two, and they do not experience any significant toxicities.

Based upon the data and experience over the course of 2014 and the first months of this year, they are planning to proceed with at least two phase 2 trials of DCVax-Direct in different cancers, in parallel during this year. In these phase 2 trials, they plan to inject multiple tumors, rather than just one tumor, and they plan to administer treatments weeks apart rather than months apart. They continue to receive strong interest for trials of DCVax-Direct in a variety of cancers.

SmithOnStocks Comment: Investors are all waiting for final data from the phase 1 portion of the trial. The last patient was enrolled in August of 2014 and it will take 8 months for this patient to reach the endpoint of the trial; this would be May of 2015. It might then take one to two months to scrub the data and analyze it. This would point to release of topline results in June or July of 2015. However, the last patient enrolled was an excess patient over and above the targeted enrollment of 40. If this patient is considered apart from the other 40, results could be released in May or so.

The dosing in the phase 2 trials will be much more intense than phase 1. Investigators will be looking to see if this may be more effective and whether it will affect the safety profile. One of the most interesting aspects of the DCVax products is their amazing safety profile.

Incidence of Brain Cancer

Brain cancers fall into two broad categories: primary (meaning the cancer first originates in the brain) and metastatic (meaning the cancer first appears elsewhere in the body, but subsequently metastasizes to the brain). In the U.S. alone, on an annual basis, there are some 40,000 new cases of primary brain cancer, and 160,000 new cases of metastatic brain cancer. The numbers are similar in Europe and the rest of the world.

Within the category of primary brain cancer, Grade 4 GBM is the most aggressive and lethal type. Among the approximately 40,000 new cases of primary brain cancer per year in the U.S., at least 12,000 cases are GBM (with some estimates as high as 17,000) and the incidence is increasing.

SmithOnStocks comment: DCVax-L requires certain levels of tumor tissue removed in surgery. I am not sure what percentage of gliomas is surgically resected, but those that are would also be candidates for DCVax-L. Hence, the addressable market might be greater than 12,000 GBM patients in the US.

The Manufacturing Process for DCVax Products

They have pioneered a DCVax-L manufacturing model under which at least 3 years of treatments are normally produced in a single personalized batch for each patient. Similarly, for DCVax Direct, they produce a full course of treatment in a single personalized batch for a patient. In addition, they have implemented special cryopreservation methods which enable this multi-year or multi-dose quantity of personalized product to be frozen, and kept frozen for years, while maintaining its viability and potency. Together, they enable the Company to incur the high costs of manufacturing just one time for each patient, and then store the multi-year quantity of product, frozen, in single doses. This makes DCVax effectively an “off the shelf” product for the patient after the initial manufacturing, even though it is personalized, and they anticipate that this will enable the pricing of DCVax to be in line with other new cancer drugs.

They also believe that both automation and economies of scale will further enhance the product economics. The manufacturing process today is also rapid: about 8 days for DCVax-L, and 7 days for DCVax-Direct, followed by quality control and release testing. The DCVax programs involve a particularly challenging operational and business requirement: their programs require a large amount of capacity in these specialized manufacturing facilities, and require that the large capacity be dedicated exclusively to our programs. The manufacturing suites must be dedicated entirely to Northwest’s s products.

The current manufacturing facilities are sufficient to produce DCVax product for at least several thousand patients per year - an amount well in excess of what is needed for the phase 3 clinical trial under way. The expansion space will also allow them to procure significantly increasing capacity as we scale-up towards many more patients for commercialization. The facility planned for the U.K. will similarly allow for scale-up there.

SmithOnStocks comment: The manufacturing process is complex and is almost as important to success as clinical trials because the manufacturing process is the product. Investors do not yet appreciate this aspect of living cell therapy and the great progress the company has made.

It is important that the Company has sufficient capacity to treat thousands of patients and the flexibility to scale up significantly from there. The Company says that it can price its products at the same level as current cancer therapies. This implies an acceptable gross margin of 60% to 80%. The two most important drugs recently approved for cancer treatment are the checkpoint modulators Opdivo and Keytruda; they are priced at $150,000 per year. If DCVax-L were priced the same each 1000 patients treated would translate into $150 million of revenues.

There is a different aspect to the pricing of DCVax-L. Treatment is spread out over a three year period. It is highly unlikely that the price would be $150,000 upon the completion of manufacturing and first injection. It would likely be spread out over three years if the product works for the patient. My guess is that the first year price will cover the cost of manufacturing which I am guessing as $30,000 and still realize a gross profit in the first year. A possibility is that the price is $50,000 per year over three years for those patients in whom it is effective.

Manufacturing Facilities for DCVax Products

They have entered into an agreement with King’s College London to manufacture DCVax-L for both clinical trial and compassionate use cases. Cognate BioServices will manage and supervise the processing in London. In Germany their partner, Fraunhofer IZI Institute in Germany, has received approval and certification from the regional and national regulatory agencies in Germany for the manufacture of DCVax for GBM. Fraunhofer IZI also received the necessary regulatory approvals to supply DCVax-L products to the U.K. for our clinical trial there.

They anticipate that the manufacturing facilities in the U.K. will eventually obtain the necessary approvals, and that the German and U.K. facilities’ will be able to supply DCVax products for anywhere in Europe; however, this may not turn out to be feasible, for regulatory, operational and/or logistical reasons.

The manufacture of living cells requires specialized facilities, equipment and personnel which are entirely different than what is required for the manufacturing of chemical or biologic compounds. Scaling up the manufacturing of living cell products to volume levels required for commercialization will require enormous amounts of these specialized facilities, equipment and personnel - especially where, as in the case of the DCVax product candidates, the product is personalized and must be made for each patient individually. Since living cell products are so new, and have barely begun to reach commercialization, the supply of the specialized facilities, equipment and personnel needed for them has not yet developed. It may not be possible for us or our manufacturers to obtain all of the specialized facilities, equipment and personnel needed for commercialization of our DCVax product candidates.

SmithOnStocks comment: Northwest has done an amazing job in planning for adequate manufacturing capacity to support the roll-out of DCVax-L if it is approved.

Environmental Remediation Liabilities on UK Manufacturing Facility

On August 19, 2014, they completed the acquisition of a facility and property in the U.K. The purchase price was £13 million ($20.8 million, excluding professional fees of $1.5 million associated with the purchase of the U.K facility). The facility is an existing building of approximately 65,000 square feet.

They plan to re-purpose the facility and have it built out as part of the expansion of manufacturing capacity, potentially doubling the building’s square footage. Such re-purposing requires approval of the applicable Planning Commission. If re-purposing is approved, then the specific design and engineering of the proposed build out will also have to be approved. In addition to the facility, the acquisition included about 25 acres of potentially developable land (as well as non-developable land). Any future development for business use will require removal of certain existing structures, permission from the Planning Commission for the intended purpose, and then permission from the Planning Commission for the specific designs and engineering.

They engaged a third party specialist to conduct certain surveys of the condition of the property which included, among other things, a preliminary analysis of potential environmental remediation exposures. They determined, based on information contained in the specialists report, that they would be required to estimate the fair value of an unconditional obligation to remediate specific ground contamination at an estimated fair of approximately $6.2 million.

They computed the preliminary estimate of the fair value of this obligation using a probability approach that measures likelihood of the following two potential outcomes: (i) a higher probability (>95%) requirement of erecting a protective barrier around the affected area at an estimated cost of approximately $4.5 million, or (iii) lower probability (<5%) requirement of having to excavate the affected area at an estimated cost of approximately $32 million. The estimate is preliminary and therefore subject to change as further studies are conducted and as additional facts come to our attention. Environmental remediation obligations are complex and technical. Accordingly, it is at least reasonably possible that any changes in our estimates could materially differ from management’s preliminary estimates.

SmithOnStocks Comment: This is the first mention I have heard of this. It sounds like the Company has 95% probability that environmental remediation will be $4.5 million and not $32 million. However, it is something else to worry about.

Relationship with Cognate

On a going forward basis, commencing with August 2013, and continuing throughout the lock-up period, Northwest and Cognate BioServices agreed to establish a vendor financing arrangement for regular ongoing payment of at least half of all invoices in unregistered, restricted common stock and warrants of our company at an initial price of $4.00 per share (the closing market price was $3.55 at that time), and the remainder in cash, subject to a most favored nation treatment with respect to terms provided to other investors or creditors (including with respect to any warrants), including share issuances upon exercise of previously issued derivative securities. Under the Cognate BioServices Agreements executed in January 2014, this arrangement will continue for 18 months from the execution of those agreements or until terminated by mutual agreement.

SmithOnStocks comment: This has been criticized as a sweetheart deal. However, I would emphasize that at the time this was a critical financing vehicle needed to conduct the phase 3 DCVax-L trial. Also, Cognate is a separate company that loaded up its balance sheet with Northwest stock in lieu of cash for much of its services and had to be compensated for that risk. The deal should expire in mid-2015.

Intellectual Property

As of December 31, 2014, they have over 136 issued patents and 47 pending patent applications worldwide, grouped into 12 patent families. Of these, 100 issued patents and 47 pending patent applications relate to the DCVax products. In the United States and Europe, some of the patents and applications relate to the composition and use of products, while other patents and applications related to other aspects such as manufacturing and quality control.

The expiration dates of the issued U.S. patents involved in the current business range from 2022 to 2028. The expiration dates of the issued European patents involved in the current business range from 2022 to 2028. For some of the earlier dates, we plan to seek extensions of the patent life, and believe we have reasonable grounds for doing so.

SmithOnStocks comment: This is an impressive amount of intellectual property.

Fast Track Status

The time period required to obtain regulatory approval varies between countries. In the U.S., for products without “Fast Track” status, it can take up to 18 months after submission of an application for product approval to receive the FDA's decision. Even with Fast Track status, FDA review and decision can take up 12 months. At present, they do not have Fast Track status for DCVax-L for GBM. They plan to apply for Fast Track status, but there can be no assurance that FDA will grant such status for DCVax-L.

Operating Activities in 2013 and 2014

They used $54.6 million in cash for operating activities during the year ended December 31, 2014. They used $37.8 million in cash for operating activities during the year ended December 31, 2013. The increase in cash used in operating activities was primarily attributable to the DCVax-Direct manufacturing and product development work described above, the launch and execution of the 41-patient phase 1 stage of the phase 1/2 clinical trial with DCVax-Direct for inoperable solid tumor cancers, the increased manufacturing of DCVax®-L for the ongoing phase 3 brain cancer trial at a growing number of sites across the US and in Europe, the preparations for launch of the Phase III trial in Canada, ,extensive negotiations of dozens of program and hospital related contracts in Germany, as well as major regulatory submissions.

Financing Activities in 2014

For the year ended December 31, 2014, financing activities primarily consisted of net proceeds from the issuance of common stock and warrants amounting to $63.3 million and net proceeds from issuance of notes for $22.6 million; offset by the repayment of $0.03 million of interest on notes payable.


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  1. It is good that 10-K confirmed those 19 pts mentioned in the abstract were rapid progressors.

    Also in Dr. Bosch’s abstract,
    “A second cohort of patients with rGBM consisted of eight patients with recurrence following several adjuvant temozolomide treatment cycles. Median overall survival (OS) for these patients is 14.7 months from the time of surgery for first recurrence. ”

    It looks like that these 8 pts were also rapid progressors but eligible to a second surgery to debulk their recurrent tumors. But why 10-k didn’t mention this?

    And from last year’s press release
    “The data received by the Company include the survival to date for all 55 patients in the “Information Arm” and data relating to the progression of their cancer for 43 of the 55 patients. ”

    I guess these 19 and 8 patients were among the 43 pts with “data relating to the progression of their cancer.” which left 16 pts undetermined.

    I am encouraged by the 8 pt cohort as it can be compared to Prophage (rGBM pts underwent gross total resection) and rindo though it may be a little unfair to rindo as rindo only targets EFGRvIII pts.

  2. Larry,

    Thanks and interesting and evenhanded. One thing I’d like to ask about is the upcoming American Association of Cancer Research meeting in Philadelphia from April 18th -22nd. I see from the program that DCVax-L and DCVax-Direct will be presented. You mention that Dr. Bosch will be presenting a paper on the former in Germany on the 26th and the Philadelphia session looks to be a repeat. However the DVax-Direct paper looks to contain new information specifically:

    “Patterns of immunological reactivity were assessed by pathological scoring on tumor biopsies for 29 patients, and included increasing necrosis in 62% of patients and emergence or amplification of infiltrating T cells in 55%”

    In the eyes of this layman this looks amazing. Do you have any comment on this? The link to the website is here:{19573A54-AE8F-4E00-9C23-BD6D62268424}

  3. There are certain criteria that investigators agree on for determining if a patient is a rapid progressor and these 19 met the criteria extremely well. KOLS pretty much agree that median overall survival for rapids is 8 to 10 months. The median overall survival of 15.1 months is striking.

    The other patients were divided among rapid progressors and pseudoprogressors and there was less certainty about which was which, So how many were rapid progressors in the group as a whole. I have seen three studies of rapid/pseudo populations in which the rapids were about 70%. If so in this population, the rapids in total would be 35 and pseudos 16 out of the population of 51. In the remaining 36 patients not discussed in the arm 17 would be rapids and 16 would be pseudos. The median overall survival estimates for pseudo that I have seen in small studies is 16 to 24 months. I have little certainty that these are indeed good estimates.

    In any event, the data in the 19 patients is extremely impressive. The hedge funds will tell AF to write that the 19 patients are really psuedos and to attack the report as making up numbers. It is his job to try to turn positive news into negative.

    As time goes on we will see continuing data from this group that will help estimate how rapids and pseudos did. However, it is mot randomized.


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