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Expert Financial Analysis and Reporting

Northwest Biotherapeutics (NWBO): Some Thoughts about the Appointment of Two New Board Members

Purpose of the Report

Northwest Biotherapeutics announced on January 25 that it is adding two new members to its current five member Board of Directors with the appointment of Ms. Susan Bayh and Mr. Cofer Black as independent Directors.  Neither Ms. Bayh nor Mr. Black has had dealings with or worked with the Company previously. I did some research on these two new directors which I thought I would share.

Susan. Bayh (55)

She is an Indiana attorney and the wife of former Indiana Senator Evan Bayh with 25 years of experience in healthcare and the biopharma industry. She handled regulatory affairs at Eli Lilly before leaving in 1994. She has served on a number of boards since then as listed below:

  • Dendreon from July 30, 2003 to June 10, 2015,
  • Dyax from July 2003 to March 30, 2012,
  • Curis since October 2000,
  • Esperion  since November 2001,
  • Cubist from June 2000 to September 29, 2004,
  • Novavax from October 28, 2004 to July 21, 2005,
  • MDRNA from July 25, 2005 to January 2009; MDRNA was formerly Nastech,
  • WellPoint Inc. (formerly Anthem Inc.) from 2001 to May 2013.
  • Anthem Insurance Companies Inc., (subsidiary of WellPoint Inc.) from 1998 to May 2003.

Her 12 years of experience at Dendreon gave her lengthy, first-hand experience in the challenges in obtaining regulatory approval, reimbursement, manufacturing and commercialization of immunotherapies. The press release quoted her as saying that “It is exciting to see the potential of DCVax, with encouraging clinical data to date, an excellent safety profile, a fast and efficient manufacturing process and a finished product that is frozen… key factors for commercialization potential.  I’ve seen it all, in terms of the challenges with personalized immune therapies… what works and what doesn’t.  I look forward to applying the lessons of my experience to help bring the DCVax technology to patients.”

In July of 2015, she was successfully operated on for a benign brain tumor. This may have resulted in a special interest in DCVax-L which is targeted at newly diagnosed glioblastoma.

Ms. Bayh has not escaped drawing some criticism in her career. She has made a considerable amount of money from her directorships and an article in her hometown newspaper, The Indianapolis Star, has accused her of being a professional director. attacked her in 2009 over her role in Wellpoint.   This article was not written by Adam Feuerstein who is famed for his attacks on Northwest.

Cofer Black (55)

He had a 28-year career in Central Intelligence Agency (CIA) during which he served as Director of the Counterterrorist Center, which had 1,300 professionals and had an annual budget in excess of $1 billion.  He was awarded the Distinguished Intelligence Medal (the CIA’s highest award for achievement) as well as numerous other awards. He was appointed Ambassador at Large and Coordinator for Counter-terrorism by President George W. Bush in December 2002.

From 2005 until 2008, he was Vice Chairman of Blackwater USA, a US-based private security firm specializing in providing security processes and services to private corporations and government agencies. Since 2009, he has been Vice President for Global Operations at Raytheon Blackbird which advises the U.S. government on security matters and equipment.  He also is a Senior Advisor to the Razor’s Edge Investment Fund, which focuses on cutting edge technologies and equipment for the intelligence communities. In the press release he said that “It is exciting to see the potential of the DCVax personalized immune therapies being developed by NW Bio for a wide range of cancers. I look forward to utilizing my expertise in helping the Company protect its technology and operations.”


Northwest has been the subject of a large scale and coordinated short selling attack of which a significant component has been an attack on the integrity of management. Anonymous hedge fund authors (who were actively shorting the stock) published several articles on Seeking Alpha that accused management of misconduct and deception in conduct of clinical trials and dealings with its contract manufacturer Cognate BioServices. These accusations, if correct, would constitute securities law violations and criminal misconduct.

The Company announced on December 8, 2015 that its Board of Directors had formed a Special Committee to oversee an independent investigation of the most recent allegation in an anonymously authored Seeking Alpha report and a derivative lawsuit which cited that report.  This was done in part at the request of its major shareholder Neil Woodford. The Special Committee has engaged Irvin Nathan and Steven Kaplan of the law firm Arnold & Porter to lead this investigation. Neither attorney has previously done any work for Northwest or otherwise been connected with the Company or its Board or management.

I see the appointments of Ms. Bayh and Mr. Cofer with their distinguished backgrounds as a further effort to answer and put away once and for all the accusations of anonymous short sellers. The current board has two company employed and three independent directors so that this will expand the number of independent directors to five out of seven directors. Their coming on board strongly suggests that they believe that Northwest has conducted itself ethically. Also, their ties to Washington D.C. may give Northwest better credibility and access to regulators who would be interested in receiving information stemming from this investigation into the short sellers. If the short seller’s allegations are contrived and incorrect, they and law firms could be guilty of criminal stock manipulation.

There are some who believe that there is a short selling cartel of hedge funds who use all possible tactics including illegal methods to drive down prices of stocks they are attacking. These include the use of dark pools to conceal their actions, high frequency trading to walk stock prices down and illegal naked shorting. There have been allegations from some companies that this cartel actually has hacked into the data bases of companies, contract research organizations and clinical investigators to get material, non-public information on clinical trials and to actually manipulate the results of some clinical trials. Mr. Black seems to be specifically selected to conduct a counter espionage effort against the hedge funds. If so and if he is successful in establishing evidence that supports these suspicions, it could force regulatory agencies who currently are ignoring the evidence of massive manipulations of stocks by hedge funds to lumber into action.

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  1. Thank you….I appreciate your digging in and uncovering important information about NWBO…I think it will be an interesting and transformational year…. “staying tuned” Cheers

  2. An interesting paper was released in Science on March 3 titled
    Clonal neoantigens elicit T cell immunoreactivity and sensitivity to immune checkpoint blockade

    A criticism of NW has been that tumors express only a few unique identifying antigens and that NW’s program does not guaranty the dendritic cells which pick up any of these. Therefore, preloaded antigens for dendritic cell uptake, or specific engineering of T cells for antigen recognition (think CAR-T) is the only way to go. This paper indicates that chemotherapy induced mutations in cancer cells creates unique neoantigens that can then be recognized by an enhanced immune response.

    The latest finding “paves the way for therapies that specifically activate these T-cells to target all the tumour cells at once based on the disease’s genetic signature,” adding that eventually “scientists could exploit this by developing a therapeutic vaccine to activate T-cells, or harvesting, growing and administering T-cells back into the patient that recognise the antigens common to every cancer cell.”

    The authors focus on engineering T cells to recognize these neoantigens. What NW does uniquely is to use the bodies own system for engineering specific T cells so that decoding the genetics of every individual’s cancer and engineering T cells for that those portions of the genetics that elicit neoantigen expression is not necessary. The power of NW technology to elicit PD-L1 expression on cancer cells is also very important and combination of NW technology with checkpoint blockade inhibitors is long over due. What make DCvax Direct additionally interesting is that the dendritic cells are injected into the tumor after chemo so that these cells are highly mutated after being placed under considerable stress. The expression of common neoantigens elicited by chemo along with the forced expression of PD-L1 gives some hope that the NW technology represents a meaningful advance for cancer treatment which will soon be seen. That is, if the company can survive the repeated attacks of shorts and if it can finally make clear some of the issues which continue to raise doubts about management.

  3. Are you aware that Susan Bayh is no longer a member of NWBO’s BOD?

    “Our Board of Directors has determined that a majority of the Board consists of members who are currently “independent” as that term is defined within the meaning of Section 5605(a)(2) of the NASDAQ Marketplace Rules. The Board of Directors considers Messrs. Farmer, Malik and Jasinowski, and Ambassador Black to be independent, and also considered Ms. Susan Bayh to be independent while she was a member of our Board during 2016”.


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