Expert Financial Analysis and Reporting

Overview

The much anticipated presentation at the New York Academy of Sciences of final results of the phase 3 trial of DCVax-L in newly diagnosed and recurrent glioblastoma was just completed. Investigators in the trial as well as questioners in the audience not affiliated with the trial described DCVax-L as a major advance in the treatment of newly diagnosed and recurrent glioblastoma. It was statistically significant on the designated endpoint of median overall survival for both newly diagnosed glioblastoma (ndGBM) and recurrent GBM (rGBM). More importantly, it showed a survival tail for both ndGBM and rGBM that was as impressive as the survival tail for checkpoint inhibitors in recurrent non-small cell lung cancer.

The trial was extremely well done. I will be writing more on the details, but because of the precipitous decline in the stock price, I will be putting out short snippets rather than one large report. The decline in the stock price in the face of extremely positive data gives credibility to my long standing belief that a group of hedge funds acting as a wolf pack employing illegal naked shorting and a flood of misinformation have the ability to control stock prices in the near term. In reports soon to follow, I will address the data from the trial in more detail, but I first wanted to address two key points that are being fallaciously made by the short sellers to justify illegal naked shorting that is going on.

My first aim is to invalidate the key arguments of the short sellers. In subsequent notes, I will break down the impressive data from the trial, but I think it is extremely important to first understand the fallacies of the arguments being offered by short sellers.

I am no longer accepting paid subscribers to my website and offering my views on stocks free. However, I did happily buy more stock today.

Possible Regulatory Filings Based on Historical Controls

One of the key arguments being put forward by short sellers concerns the use of data on standard of care from other concurrently run trials  for a control arm in the trial, maintaining that regulatory agencies will not accept this. As would be expected, they are making gross misrepresentations; here is a more balanced view.

I firmly believe that based on the phase 3 trial results, NWBO will submit the findings along with the statistical analysis plan (SAP) used to analyze the results to regulatory agencies throughout the world. I want to highlight one aspect of the SAP that could determine timing of approvals. Before data lock, NWBO elected to use aggregated data from standard of care arms in other GBM trials that ran concurrently as a control arm instead of a placebo arm. This is a marked deviation from the de rigueur for clinical trial statistical analysis plans in which the control arm in a trial is a placebo. See my note Addressing Key Questions Relating to the Possible Approval and Commercialization of DCVax-L in Glioblastoma Multiforme  for more detail.

So how will the regulatory agencies view this? We know that the MHRA, the United Kingdom equivalent of the FDA, has already approved the use of data from concurrently run trials as a control arm to analyze the results of the DCVax-L phase 3 trial. Also, the MHRA has approved NWBO’s Sawston UK production facility for manufacturing DCVax-L for compassionate use which bodes well but does not guarantee approval for commercial use. Investors sometimes overlook that gaining approval for commercial manufacturing is as important as demonstrating clinical efficacy. Also, Dr. Keyoumers Ashkan , the lead investigator of the European part of the trial and an enthusiastic supporter of DCVax-L based on extensive compassionate use experience, is highly regarded in the UK and by the MHRA. Finally, the UK has made a concerted effort to lead the world in bringing to market potential breakthrough therapies. Putting all of these things together leads me to believe that the UK will be the first agency to approve DCVax-L. I would speculate that there is a chance for approval late this year or early next.

So what about the FDA? Unlike the MHRA, the FDA has not indicated publicly that it will accept a statistical analysis plan using historical controls. This is not to say that they will or will not. This is new ground for the FDA and we don’t know what they will do. We do know that Richard Pazdur, the long time and well respected head of FDA’s Oncology Center of Excellence has recently indicated that under some conditions historical controls would be appropriate. I think that the FDA will accept historical controls but I can’t have the same level of certainty as with the MHRA.

See my note FDA Statement Regarding Use of External Controls in Clinical Trials is a Huge Positive for a more detailed discussion.

Northwest Biotherapeutics: FDA Statement Regarding Use of External Controls in Clinical Trials is a Huge Positive

The Canadian equivalent to the FDA, Health Canada, tends to closely collaborate with the MHRA. Hence, there is the possibility that approval in Canada could be nearly as rapid as the UK. In the event that Health Canada moved more rapidly than the FDA in approving the product, I would expect significant numbers of GBM patients in the US to seek treatment in Canada. Like the FDA, the European Union’s EMA has not signaled how it will consider historical controls.

One overarching factor that will be key in all regulatory filings is the extremely impressive safety profile of DCVax-L. Most cancer therapies have highly toxic, even life-threatening side effect. DCVax-L has an almost benign side effect profile. Drugs are approved on the basis of a risk benefit analysis making this a huge positive in regulatory decisions.

Short Sellers Maintain that DCVax-L Phase 3 Results Missed the Endpoint of Progression Free Survival

When the trial was designed and initiated over 14 years ago, management thought that the primary endpoint of the trial would be mPFS with the key secondary endpoint being mOS. These were customary endpoints for cancer trials at the time because clinical development was almost entirely focused on chemotherapy drugs. If they are effective, chemotherapy drugs quickly shrink the size of the tumor as measured by CTI and MRI imaging. Progression free survival refers to situations in which the tumor is eliminated, shrunk or is not growing. Hence mPFS as judged by imaging is a valid primary endpoint for chemotherapy although mOS is the gold standard.

In 2013, six years after the DCVax-L phase 3 trial began, important new immunotherapy drugs began to emerge as effective cancer therapies including but not limited to the checkpoint inhibitors, Yervoy, Opdivo and Keytruda. It soon became apparent that these drugs act differently than chemotherapy. Their mechanism of action induces the body’s natural immune cells to attack the cancer which can lead to inflammation of the area comprised of cancer and surrounding cells. Imaging technologies may then show an enlargement of tissue which mistakenly can be interpreted as the tumor getting bigger or progressing even if the immunotherapy drugs go on to effectively shrink or eliminate the tumor. This is known as pseudo-progression. At the time of the initiation of the DCVax-L trial in 2007, the phenomenon of pseudo-progression in brain cancer was virtually unknown.

The thinking at the beginning of the DCVax-L phase 3 trial was that mPFS would be the primary endpoint, but based on the clinical experience with checkpoint inhibitors this came to be viewed as problematical because pseudo-progressors could not be easily differentiated from patients whose cancer had actually progressed. While the trial was ongoing and blinded, it became apparent to NWBO based on the accumulating evidence from trials of other immunotherapy drugs that mPFS was an inappropriate primary endpoint.

The Statistical Analysis Plan (SAP) must be determined and specified prior to data lock which in this case was October 5, 2020. So, before this date, the SAP to be used to evaluate the trial was specified and mOS was designated as the primary endpoint. This is a much more meaningful endpoint than mPFS in almost all cancer trials and unquestionably is almost always the appropriate endpoint for immunotherapy drugs like DCVax-L.