Expert Financial Analysis and Reporting

Introduction

Northwest Biotherapeutics held a conference call on May 27^th to discuss interim results of its phase 1/2, first in human, trial of DCVax-Direct. This is a new type of dendritic cell vaccine in which the dendritic cells are injected directly into the tumor mass and pick up cancer antigens that are present in that specific tumor. This differs from its lead product DCVax-L in which tumor antigens are loaded into dendritic cells ex vivo and then reinjected into the body. This is an interesting new concept because of the means of administration and because this is a more advanced dendritic cell that in animal studies has been shown to be several times more powerful in loading tumor antigens. This is dendritic cell cancer vaccine 2.0.

In this note, I summarize what I found to be key takeaway points in the conference call. I start with CEO Linda Powers opening remarks. After that she addressed questions that had been submitted before the meeting by participants. I found this to be a more informative way of conducting the call than the conventional method of letting analysts ask questions. This usually results in long winded grandstanding by analysts.

Opening Remarks by Linda Powers

Ms. Powers stated that this phase 1/2 trial involves both new technology platform and a new disease target. The Company’s first product DCVax-L is targeted at glioblastoma multiforme initially but has also been in preliminary trials in ovarian cancer and prostate cancer. In the case of glioblastoma multiforme it is being studied as part of standard of care which is given shortly after surgical resection. Patients have not previous received chemotherapy or radiation.

Ms. Powers emphasized that the results are very early and more time is needed to evaluate the ultimate effect of DCVax-Direct but that the Company and investigators from M.D. Anderson are very encouraged. M.D, Anderson, which is conducting this trial, is one of the top two or three cancer centers in the US and very highly regarded.

In the treatment of most solid tumors, the first treatment is surgical resection of the tumor to remove as much of the primary tumor mass as possible. This is then followed by chemotherapy and radiation to further reduce the size of the tumor and its metastases. This trial is being conducted in patients with inoperable tumors due either to the location of the tumor or because the tumor has metastasized to the extent that surgery would not be of benefit.

The patient group in which DCVax Direct is being tested has very advanced disease. These patients have exhausted treatment options often having gone through several prior courses of therapy. Most have the option of palliative therapy or an experimental drug like DCVax Direct. Because the tumors have not been surgically resected, they are large tumors with metastases that are growing rapidly. These are very difficult to treat patients in whom any kind of response is of great interest; this represents an urgent and unmet medical need. If DCVax Direct is ultimately approved, its primary use will be in less severely ill, surgically resected patients who would be expected to respond better.

Ms. Powers said that over 58% of the first 19 patients in the trial who have received at least three injections over a 2 week period are showing responses to the drug. As a reminder the trial protocol calls for six treatments given at day 0, day 7, day 14 and week 8, week 16 and week 32. These patients showing responses are only two weeks into an 8 month course of therapy

She compared this to the checkpoint inhibitor nivolumab of Bristol-Myers Squibb. Nivolimumab was used as a single agent in 94 heavily pre-treated melanoma patients. Of these patients 28% had a complete or partial response. In 76 non-small cell lung cancer patients, 18% had complete or partial responses. Many of these Reponses were durable lasting up to a year.

She emphasized that we can’t directly compare results of DCVax-L with nivolumab. We don’t know if the initial responses which are based on the detection of significant tumor necrosis and immune cell infiltration into the tumor with some cases of tumor shrinkage will translate into durable complete or partial responses. So far, the best response seen in any patient is a 28% shrinkage of the tumor which falls just short of the 30% shrinkage which qualifies as a partial response. On the other hand, the responses seen with DCVax-Direct are based on just two weeks of therapy. In immune therapy, responses usually improve over time, but this remains to be determined.

If DCVax-Direct can show 20% to 30% objective responses, it has to be viewed as an extremely significant drug. Wall Street analysts are super excited about the potential of nivolimumab and Merck’s similar drug lambrolizumab with sales estimates of as much as $5 billion for these two drugs by 2020. This means that investors will be closely watching updates on the status of patients in the DCVax Direct trial as the year progresses. Investors will want to see some objectives responses develop that are durable.

The DCVax-Direct trial is composed of a phase 1 trial that will enroll 36 patients. In this conference call, Ms. Powers reported on the first 19 patients treated in the phase 1 segment. After completion, the trial will roll seamlessly into a phase 2 trial of 24 patients. This is an unusually large for a first in human trial. Ordinarily, such trials involve 12 to 18 patients.

The main focus of the phase 1 portion of the trial is on safety, but indications of efficacy can also be seen. In terms of safety, the drug is extremely well tolerated. The main side effect being seen is a fever at the time of injection that lasts for a day or two. This is a result of the biological effect of the drug which causes an immune response. This can be treated with Tylenol. There has been one case of mild nausea reported but investigators believe that this was caused by another drug being taken by the patient. There is pain upon injection of the needle that is comparable to that of a biopsy that can be treated with a local anesthetic.

Physicians involved in the trial report that DCVax Direct is easy to administer using an imaging technology such as ultrasound or CT to direct the needle to the tumor in which it is to be injected. They believe that DCVax-Direct can be easily incorporated into their treatment regimens.

Early Results

The early results as reported by NWBO on the 11 of 19 patients treated that showed an early response were as follows:

• 8 of 11 patients have shown signs of tumor necrosis (cell death), immune cell infiltration into the tumor and stabile disease. Biopsies showed substantial or extensive tumor necrosis, as well as substantial accumulation of immune cells in and around the tumors.
• 6 of these 8 patients showed tumor shrinkage or no disease progression based on imaging studies.
• The other 2 of 8 patients showed enlargement of their tumor but the tumors based on biopsies had substantial necrosis and substantial infiltration of immune cells.
• In addition to these 8 patients, there were 3 other patients that showed stabile disease but with no evidence of tumor necrosis or infiltration of immune cells.

In judging these results, she pointed out that we have to take into account that the results are early as none of the patients have completed therapy that calls for six injections over 32 weeks or 8 months. The data indicates a meaningful initial effect on 11 of those 19 patients who have received at least three injections over a two week period. She stated that what will be extremely important is whether these effects are temporary or will they hold or improve over time. Generally, immune therapies produce results more slowly with an improving response over time so that she would hope that there would be improvement with time, but this remains to be seen.

Questions and Answers

Ms. Powers next addressed questions from the participants. I recount her answers and in some cases I add my own comments.

Question: Do you think that results will improve or diminish over time?

NWBO: It is too early to predict. Results seen so far are consistent with the biological effect that has been seen with DCVax-L and other immune therapies like Yervoy, Provenge and the anti-PD-1 drugs from BMY and MRK.

SmithOnStocks The response for immune therapies based on the experience we have seen with the two approved immunotherapies, Yervoy and Provenge, is different than older therapies. Chemotherapies when effective will quickly shrink the tumor and their efficacy is based on the degree to which the tumor shrinks. This ranges from a complete response in which the tumor is not detectable (other than scar tissue) to a partial response in which half or more of the tumor disappears or to stabile disease in which the cancer no longer grows. A complete or partial response is generally deemed a success for chemotherapy and stabile disease is sometimes looked at as a positive outcome in treatment.

Judging the response of immune therapies is somewhat different from chemotherapy. In addition to looking for tumor shrinkage, effectiveness is also judged by the degree to which the immune system can be activated to attack the tumor. Investigators want to see immune cells infiltrating or flocking to the tumor and signs of tumor cell death. In some patients in the case of Yervoy and Provenge, the size of the tumor actually increased initially due to the accumulation of dead (necrosed tissue) and the inflammatory reaction caused by the immune cells attacking the tumor. Hence, shrinkage of the tumor while important and the primary goal may not be seen early in immunotherapy.

 

Question: What doses are being used and is there a dose response?

NWBO: Three dose levels are being used in the trial. These are a low dose of 2 million cells, a medium dose of 6 million cells and a high dose of 16 million cells. The FDA has required at least three patients each to receive 2 million cells, 6 million cells or 16 million cells. Other patients are scattered among these dose levels. The dose on which the patient is started is maintained through the trial. They have not seen a dose response so far. This was also the case with DCVax-L.

SmithOnStocks: With conventional drug therapy, investigators like to see a dose response in which efficacy increases as the dose is increased. Of course, side effects also increase and the maximum dose of a drug is determined by the limits of the side effect profile. I have already seen the bears suggest that lack of dose response means that the drug is not working despite the effects seen on the tumors. However, I have seen the same lack of dose response reported in other living cell therapies.

 

Question: When will phase 2 start?

NWBO: The trial will slide seamlessly into phase 2 after phase 1 has completed. It has already been approved by the FDA.

Question: Can you determine which types of solid tumors will respond best?

NWBO: It is too early to tell. So far, we are seeing responses in multiple solid tumor types. We previously reported on a response in a sarcoma patient and we have seen a response in a second sarcoma patient as well. We have also seen Reponses in pancreatic cancer and metastatic colon cancer.

SmithOnStocks: These are very difficult to treat cancers.

 

Question: How soon after starting treatment do you begin to see an effect on the tumor?

NWBO: The current protocol calls for injecting just one tumor location. We are looking for a localized effect at the site of injection and very importantly are looking for an effect on distant metastases. The shrinkage seen in some patients is earlier than we had expected.

SmithOnStocks: It is hoped that the immune response will be systemic so that there will be an effect not just at the site of injection but also at distant metastases. A number of other immune therapies that use local injections have reported a systemic effect.

 

Question: Will future trial use one injection?

NWBO: Future trials will almost certainly involve multiple injections as these tumors have large primary tumor masses and also large metastases. However, this phase 1/2 trial will only use one injection.

 

Question: How do you see the pace of enrollment in this trial and future trials?

NWBO: In the early stages of the trial, the protocol required that each patient treated would receive two injections. Then the investigators would have to wait 2 to 3 weeks before enrolling the next patient. This is a typical safety precaution in a first in human trial. This initially slowed enrollment but in March those restrictions were lifted and the remainder of the 36 patients have either been enrolled or have completed screening. Enrollment occurs after screening and manufacturing have been completed.

SmithOnStocks Future trials should also enroll quickly. Patients are desperate for a treatment that may help. Also, the side effects of this treatment are minimal. This is unlike in chemotherapy where the side effects can so severely effect quality of life that the patient may opt to not undergo treatment.

 

Question: What kind and what amount of immune cells are you seeing in the tumors?

NWBO: We are seeing significant amounts of CD-4 helper T-cells and CD-8 killer T-cells. We are also seeing associated immune cells such as macrophages. We are seeing major T-cell response in patients who respond.

SmithOnStocks: The whole theory behind cancer vaccines is to orchestrate a T-cell led immune response in the tumor.

 

Question: What is the maximum tumor shrinkage you have seen?

NWBO: Bear in mind that we are reporting on 19 patients and none of these have received more than three injections, i.e. one at day 0, one at day 7 and one at two weeks. The maximum response has been 28% shrinkage in the tumor. We have had three cases in which the tumor actually enlarged. However, through biopsy, it was seen that there was significant necrosis and immune cell infiltration. In other patients, we have seen that at some point this leads to a collapse in the tumor and a resultant shrinkage.

SmithOnStocks:  The response for immune therapies based on the experience we have seen with the two approved immunotherapies, Yervoy and Provenge, is different than older therapies. Chemotherapies when effective will quickly shrink the tumor and their efficacy is based on the degree to which the tumor shrinks. This ranges from a complete response in which the tumor is not detectable (other than scar tissue) to a partial response in which half or more of the tumor disappears or to stabile disease in which the cancer no longer grows. A complete or partial response is generally deemed a success for chemotherapy and stabile disease is sometimes looked at as a positive outcome in treatment.

Judging the response of immune therapies is somewhat different from chemotherapy. In addition to looking for tumor shrinkage, effectiveness is also judged by the degree to which the immune system can be activated to attack the tumor. Investigators want to see immune cells infiltrating or flocking to the tumor and signs of tumor cell death. In some patients in the case of Yervoy and Provenge, the size of the tumor actually increased initially due to the accumulation of dead (necrosed tissue) and the inflammatory reaction caused by the immune cells attacking the tumor. Hence, shrinkage of the tumor while important and the primary goal may not be seen early in immunotherapy.

 

Question: What do you think was the reason that 8 patients failed to respond to therapy?

NWBO: All of the patients in the trial have received significant prior treatment involving chemotherapy and radiation which can severely affect the immune system. Cancer cell vaccines are dependent on generating a strong immune response. While the data is too limited and too early to determine why some patients failed, it may be the case that their immune systems were just too impaired by prior treatment to mount an effective immune response.

 

Question: What is the current stage of enrollment?

NWBO: Of the 36 patients to be enrolled in phase 1, 19 have received three injections out of the six injections required by the protocol. Enrollment in the trial is defined as patients who have been screened and for whom the manufacturing process has started. A small number of patients do not have sufficient numbers of precursor cells needed to produce dendritic cells for their therapy and can’t be enrolled.

There are 4 patients who have received two or fewer injections. There are 7 scheduled to receive their first injection in the next week or two. The remaining 8 patients will be injected by the end of June. The last patient enrolled in the trial should receive their last injection 8 months after the first injection. This indicates that the phase 1 portion will be completed by March of 2015.

The phase 2 trial of 24 patients has already been approved by the FDA. Hence, it can begin shortly after completion of phase 1.

 

Question: Was the tumor response seen in just the early enrollees?

NWBO: The tumor response was seen in later as well as earlier enrollees.

 

Question: How was the determination of the tumor response made?

NWBO: This was a joint decision of the M.D, Anderson investigators, the CRO running the trial and NWBO. The decision was reached by consensus.

SmithOnStocks: If bears challenge the results, they have to challenge the integrity of M.D. Anderson investigators. This will be a hard argument to make.

 

The Feuerstein Response

No positive announcement by NWBO goes without a knee jerk negative blog from Adam Feuerstein. Altogether, he has written 14 negative blogs on the Company since the beginning of March and has launched repeated personal attacks on the CEO Linda Powers. He has no objectivity or balance in his blogs, choosing only to focus on potential negatives. I have included his most recent blog. I think that the negatives he raises are addressed in this note and I am not going to refute his arguments further than has already been done.

Cancer Patients Aren't Responding to Northwest Bio's DCVax-Direct

By: Adam Feuerstein| 05/27/14 - 06:07 PM EDT

 

Cancer Patients Aren't Responding to Northwest Bio's DCVax-Direct

By: Adam Feuerstein| 05/27/14 - 06:07 PM EDT

The tumor response rate attributable to Northwest Biotherapeutics (NWBO) DCVax-Direct is zero. None of the 19 patients with advanced, metastatic cancers have responded to treatment with DCVax-Direct in an ongoing phase I clinical study.

Perhaps you're confused by Northwest Bio's glowingly positive DCVax-Direct press release issued Tuesday morning, or CEO Linda Power's conference call after Tuesday's market close in which she reiterated how well desperately sick cancer patients were responding to the company's magical dendritic cell soup.

Well, you only have to let Powers speak for 20 minutes or so before the truth comes dribbling out. On her conference call, Powers acknowledges the best response seen so far following DCVax-Direct injections directly into a single tumor was 28% shrinkage. Under the globally accepted definition of tumor response known as RECIST (Response Evaluation Criteria in SolidTumors), a partial response requires a 30% reduction in the size of the target lesion.

DCVax-Direct: 0% response rate.

Keep spinning, Linda! There are more cancer patients with little hope who need to be exploited. The "Naysayers" will always be here to unpack the truth.

Wednesday update: Powers, on last night's conference call, conjured up a false and misleading comparison between DCVax-Direct and the cancer immunotherapy "checkpoint inhibitors" being developed by Bristol-Myers Squibb (BMY), Merck (MRK) and other large drug companies. I'm paraphrasing her words, but Powers claims the 50% response rate observed in the DC-Vax Direct phase I study to date is greater than the 25% response rates seen when checkpoint inhibitors are used as monotherapy, and even better than the 40% response rates for checkpoint inhibitor combination therapy.

Excuse my language, but Powers is spewing bullshit. Bristol's nivolumab and Merck's MK-3475 have shown to be remarkably effective at shrinking tumors and prolonging survival in patients with advanced melanoma, lung cancer and other solid tumors as both monotherapy and in combinations. I've already written about some of the checkpoint inhibitor data which will be presented in more detail at the upcoming American Society of Clinical Oncology (ASCO) annual meeting. Over the weekend and on Monday, even more impressive results from these drugs will be announced.

For Powers to compare the unconfirmed, anecdotal and faux responses to DCVax-Direct to the real and profound efficacy seen from checkpoint inhibitors is completely irresponsible and absurd. But like most of her actions, Powers' motivation is stock promotion, not helping cancer patients. Northwest Bio would rather issue press releases and hold conference calls for ignorant retail investors than present real clinical data at a respected medical meeting like ASCO. Northwest Bio didn't submit any of its DCVAX-Direct data for peer review and presentation at ASCO. Instead, the company bought a booth in the exhibition hall, where it can give away free pens to anyone who happens to walk by.

 

 

 

 

 

 

 

 

 

 

 

Tagged as dcvax direct, Northest Biotherapeutics, NWBO + Categorized as Company Reports