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The Potentially Key Role of Northwest Biotherapeutics in the Emerging Immuno-Oncology Landscape (NWBO, Buy, $6.19)

Investment Overview

Linda Powers was invited to the 7th Annual Phacilitate Immunotherapy Forum in Washington D.C. to speak on the potential role of personalized immunotherapy drugs in the treatment of cancer. She was prominently featured in the agenda as a speaker in which she explained Northwest’s business strategy and as a participant on a panel discussion.

My key takeaway from her talk was her articulation of Northwest Biotherapeutics' strategic vision. This helps investors to better understand the unique aspects of NWBO’s dendritic cell vaccine technology platform and its potential role in the rapidly developing immuno-oncology landscape; namely, that the Company’s DCVax-L and DCVax Direct cancer vaccines are based on a broad spectrum anti-cancer technology while virtually all of the other exciting new immunotherapies as well as targeted therapy drugs are narrow spectrum “rifle shots.”  They are single agents aiming at single targets of either the tumor or the patient’s immune system. I will go into this in greater detail later in this note

Let me briefly review some history. The introduction of Rituxan in 1997 was the major catalyst for a new approach to the treatment of cancer that has triggered intense interest in immuno-oncology. This was a marked departure from the use of chemotherapy drugs. Catalyzed by the clinical and commercial success of monoclonal antibodies, new approaches now seek to build on other distinct mechanisms that have evolved over perhaps a billion years that the immune system employs to rid the body of cancerous cells.

The success of Rituxan slowly at first and then like a snowball rolling down hill, began to build momentum in immuno-oncology drug research and development. Rituxan was an antibody that targeted CD-20 that is expressed on cancerous B-cells. Today, almost every major biopharma company and innumerable small companies have active programs to develop monoclonal antibodies aimed at a distinct cancer targets. A greater understanding of the functioning of the immune system has given rise to exciting new immuno-oncology technologies. The industry has moved beyond monoclonal antibodies with targeted therapy, the checkpoint modulators and now the first generation of engineered T-cells-the CAR-T products.

Each of these technologies is a rifle shot. By this, I mean that they activate or target a particular aspect of the broad immune response to cancer or block a biological pathway that cancer cells use to proliferate. Monoclonal antibodies target one antigen on cancer cells. Targeted therapies address a particular mechanism or activity pathway that allows cancer cells to proliferate. Checkpoint modulators are antibodies that address one of many distinct receptors on T-cells that modulate T-cell activity. The CAR-T cells are genetically engineered to target just one antigen on cancer cells. In contrast and importantly, nature designed dendritic cells to mobilize large populations of T-cells and B-cells targeting diverse antigens.

Rifle shot drug development approaches address just one mechanism that is a part of an incredibly complex biological system that is involved with cancer cells. To use an analogy with antibiotics, they are narrow spectrum anti-cancer drugs. As with antibiotics, this means that it is likely that they will have to be used in various combinations to control a cancer; this is a problem. Another speaker at the conference, Dr. Roy Barnes from Merck, summed up the conundrum of drug developers which was echoed by other speakers. He said that there are an infinite number of combinations of rifle shots with other rifle shots, but there is not enough money in the whole world to pursue all of them.

The great promise of dendritic cell vaccines is that they can mobilize the broad, natural immune response against cancer. The dendritic cell is believed to be the master cell in the cascade of biological events that lead to the activation of all components of the adaptive immune system-T-cells, B-cells and the cytokines that they release. Unlike the rifle shot products, they can target most (all?) of the antigens characterizing a cancer, not just one. As an aside, their activity is critically dependent on how the dendritic cell based products are designed. Differences in the manufacturing process can lead to very different activity. Once you have seen one dendritic cell vaccine, you have seen one dendritic cell vaccine.

To date, most parties developing dendritic cell vaccines have chosen to use only one antigen or a handful of antigens, not the full set of antigens that the DCVax vaccines are designed to do. The DCVax vaccines are intended to be a broad spectrum approach to mobilizing the immune system to fight cancer. If the analogy with antibiotics ultimately applies to cancer, they could be the backbone of combinations with various rifle shot products.

Wall Street has embraced the rifle shot approaches with great enthusiasm. In 2014, CAR-T cells, which are the first generation of engineered T-cells, caused great excitement. The two leading small biotechnology companies involved in CAR-T product development, Kite Pharma (KITE) and Juno Therapeutics (JUNO), came public and sell at market valuations five to eight times greater than Northwest. Success in the DCVax-L and DCVax Direct trials would confirm the biological hypothesis that suggests that Northwest has a broad spectrum approach to treating cancer in a world in which other companies have narrow spectrum agents. This could change and have important implications for the market value of Northwest.

I think that the uniqueness of the Northwest Biotechnology platform has not been understood or appreciated by investors, but this could change in the coming year. The Company has advanced its products to the proof of concept stage. The phase 3 trial of DCVax-L in glioblastoma will report topline results in newly diagnosed glioblastoma in early 2016. Meaningful interim looks for a phase 2 trial of DCVax Direct will help to define its role in the treatment of inoperable solid tumors, also in early 2016.

The year 2016 will be a definitive year for Northwest and for defining the role of dendritic cell vaccines in immuno-oncology. I obviously do not know with certainty that these trials will be successful, but the available data from DCVax-L and DCVax Direct is encouraging. Also the Paul Ehrlich Institute, the German equivalent of the FDA, has approved DCVax-L for early access in Germany even before the phase 3 trial results are known. This means that the product can be prescribed to patients suffering from any kind of glioma brain tumor (gliomas are primary brain cancers, not metastases of cancers occurring elsewhere in the body).

The Medicines and Healthcare Products Regulatory Agency, the UK equivalent of the FDA, is moving through a similar process to the Paul Ehrlich Institute. Both regulatory agencies have looked at the same data that we are perusing (and perhaps more) and appear to have reached the conclusion that DCVax-L likely will be successful in its clinical trials. This is an important reason supporting my Buy recommendation on the stock.

In a presentation of just 20 minutes, Ms. Powers was limited in the amount of detail that she could go into. I listened carefully to the key points that she made. I then took the liberty of adding additional background that may help to put her remarks in perspective and also to compare the dendritic cell cancer vaccines of Northwest to the first generation CAR-T cell products. While I try to make it clear, the reader should be alert as to what Ms. Powers said and what is my background information.

Historical Perspective and Background on Autologous Cell Immuno-therapies for Cancer

Northwest Biotherapeutics (NWBO) has faced considerable headwinds over the last decade as both large pharmaceutical and big biotechnology companies have not endorsed its personalized medicines approach based on dendritic cell cancer vaccines. Likewise and perhaps because of this, investors have been extremely skeptical and in fact, Northwest has been the subject of an extremely aggressive shorting campaign from hedge funds.

Autologous cell therapy as the basis of personalized medicine has been looked at skeptically by the pharmaceutical industry in part because it does not fit their business models which are based on the mass production of off the shelf medicines; a one size fits all approach. Let me illustrate this point by looking at monoclonal antibodies, which are the most intensively studied drug technology in the immuno-oncology space. Virtually every large biopharm company and many small ones are intensively pursuing monoclonal drugs. Using large stainless steel fermenters, thousands of doses of identical drugs can be produced in one production run.

Autologous cell therapy on the other hand requires a production run to produce a drug that is specific to the cancer of just one patient. This is a difficult manufacturing process requiring multiple steps. It is labor intensive and presents challenging quality control issues. It takes Northwest eight days to produce vaccine for one patient.

Another reason that Linda Powers and other CEOs involved in autologous cell therapies have not had the support of big pharma is that big pharma has been a very slow adapter of new technologies (this is changing). It is important to note that the first important monoclonal antibody drug Rituxan (current sales of $6.9 billion) was introduced in 1997. Initially and for many years afterwards, this technology was ignored by the big companies. Indeed, Merck only began to emphasize monoclonals about five years ago, but now its monoclonal drug Keytruda, which targets the checkpoint modulator PD-1 on T-cells, is its major hope for the future.

Northwest has also had to fight a strong bias against cancer vaccines. There have been a long string of failures in the cancer vaccine field and only one product has been approved. This was the dendritic cell cancer vaccine Provenge that was approved in 2011 and has current sales of about $300 million. The idea behind cancer vaccines is to activate the adaptive component of the immune system to activate T-cells and antibodies from B-cells that  recognize and attack antigens that are expressed primarily or entirely in cancer cells and not much or not at all in normal cells. This mirrors what the human body does when it mobilizes an attack against cancers. It recognizes antigens and mobilizes a T-cell and B-cell attack specifically against cells expressing those antigens.

In the human immune system, dendritic cells play a critical role in the creation of a response against cancer antigens. They reside throughout tissues of the body and through several mechanisms which I won’t discuss here capture cancer antigens. They then travel to the lymph nodes and through the major histocompatibility complex present these antigens to circulating killer and helper T-cells. This leads to the activation of T-cells that are specific to the antigen(s) that the dendritic cells have captured and presented.

These T-cells directly attack cancer cells by zeroing in on the antigens for which the T cells have been activated, and then go on to attack other cancer cells (they are serial killers). They also differentiate into millions of clones that also attack cancer cells. B-cells are similarly trained to create antibodies against cancer antigens that have been presented by dendritic cells. The dendritic cell is believed to play the most important role in the activation of the adaptive immune system and is referred to as the “professional” antigen presenting cell.

In cancers, the normal immune response has failed to eradicate or control a cancer. Over the course of a lifetime, the immune system eliminates or walls off innumerable abnormal cells that have mutated and could progress to cancer. However, cancer cells can become successful in eluding detection by the immune system or become successful in counteracting the killing mechanisms of immune cells. Northwest’s technology seeks to create dendritic cells that will restore and/or stimulate the immune response to a cancer.

In the case of Northwest’s DCVax-L vaccine for treating glioblastoma multiforme, monocytes are first taken from the patient and matured outside the body into dendritic cells. The first step in the treatment of cancer is to surgically remove as much of the tumor mass as possible. Tumor tissue is obtained from the patient undergoing the surgical procedure and lysed. The lysed tumor tissue is then exposed to the dendritic cells which results in the dendritic cells taking up, processing and then displaying the antigens of that tumor. These antigen loaded dendritic cells are then injected back into the patient. They travel to the lymph nodes and present these cancer antigens to both helper T-cells and killer T-cells circulating in the lymph as they pass through lymph nodes.

This trains the immune system to produce killer T-cells and B-cells that are specific to the cancer antigens presented by the dendritic cells. These then attack cancers that express those antigens. A very important characteristic of NWBO’s cancer vaccines is that they can produce T-cells and B-cells that target a broad spectrum of antigens that are associated with the cancer. There may be tens or hundreds of antigens that are important to a particular cancer and “rifle shots” only target one.

Dendritic cells can have a large multiplier effect. Two million dendritic cells injected into the body can mobilize hundreds of millions of T-cells. Importantly, these T-cells are not just directed at one antigen but all or most of those in the patient’s tumor which have been presented by the dendritic cells. One way to think of this is to compare this to antibiotics. NWBO’s cancer vaccines are broad spectrum anti-cancer agents while monoclonal antibodies and CAR-T cells that target just one antigen are narrow spectrum, single agent “rifle shots”.

2014 Was a Watershed Year for Autologous Cell Immunotherapies Directed Against Cancer

Last year saw some extremely important developments that seem to signal an abrupt change in attitude by big pharma and investors about autologous cell immunotherapies for cancer. The emerging biotechnology companies Kite and Juno came public and soared to current market capitalizations of $3.1 billion and $4.7 billion. Both use an autologous cell technology which is based on T-cells whereas Northwest uses autologous dendritic cells.

The technology used by Kite and Juno relies on a blood draw to capture T-cells cells from a cancer patient which are then genetically engineered. Using a viral vector, genes coding for a T-cell receptor are incorporated in the DNA of the T-cell. This gives rise to a receptor that is expressed on the surface of the T-cell that is specific for one cancer antigen. These engineered T-cells are then differentiated into many more cells and reinjected in the body to seek out and destroy cancer cells expressing that antigen.

I said earlier that big pharma has been a slow adapter of new technologies, but this could be changing. Novartis has jumped into the lead position in CAR-T development based on collaboration with the University of Pennsylvania. They are in a phase 2 trial in acute lymphocytic leukemia (ALL) that could be the basis for regulatory approval in 2016 or 2017 if trial results like those seen in phase 1/2 trials at Penn are confirmed in this study. It is important to note that neither Kite nor Juno has conducted a clinical trial with their products. Their data is based on trials done at the National Cancer Institute and leading academia centers. Juno will begin a phase 2 trial in acute lymphocytic leukemia this year and Kite will conduct a phase 2 trial in diffuse large B-cell lymphoma. Novartis is likely to come to market one or two years before Kite and Juno.

Like autologous cell treatments, the stigma against cancer vaccines may also be changing. Last year Celldex reported results in a trial in recurrent glioblastoma with its cancer vaccine rindopepimut (not a dendritic cell cancer vaccine) which were quite encouraging and could be the basis for approval in 2015 or 2016. This has also encouraged investors that a much larger and well conducted trial with rindopepimut in newly diagnosed glioblastoma multiforme will report out positive topline results in 2016. Rindopepimut is based on a peptide that mimics the antigen EGFRvIII that is expressed in 30% of GBM cancers; it triggers an immune response against any cell expressing EGFRvIII; it is a rifle shot.

Amgen will produce phase 3 results in malignant melanoma for the viral cancer vaccine T-Vac (talimogene laherparepvec) in 2015. This is a different technology than dendritic cell based vaccines. It is engineered from the herpes virus that causes cold sores. The virus is attenuated so that it can no longer cause infections, is engineered to be more selective in infecting cancer cells and is engineered to secrete GM-CSF which stimulates an immune response. This dual mechanism of action directly attacks cancer cells as well as generating a broad immune response. It is injected directly into the cancer. Amgen acquired this technology through the acquisition of the private company BioVex in 2011. It paid $475 million in cash and may pay up to an additional $575 million depending on regulatory and commercial milestones.

Ms. Powers Comments on Characteristics of Autologous Cell Immuno-therapy

Differences of Autologous Cell Immuno-therapies from Off the Shelf Cancer Products

Ms. Powers in her presentation acknowledged that autologous therapies are more cumbersome than off the shelf medicines like chemotherapy, monoclonals and targeted therapies. There are many processes and many people involved in creating just one course of therapy for one patient. She then went on to discuss the potentially very important advantages of personalized medicines. She made the strong point that cancers are personalized because of the numerous mutations involved in cancers. To address these mutations requires personalized therapeutic approaches

She noted that different types of cancers have different mutagenic potential. Hematological cancer like leukemias and lymphomas seem to have fewer genetic mutations than many solid tumors. (Hematological tumors have been the key cancer targets of CAR-T therapies to date for reasons that I will discuss later). The most mutagenic cancers are melanoma and non-small cell lung cancer, with colorectal at the high end of the range as well. In general, solid tumors are much more mutagenic than hematological cancers; solid tumors are the targets for DCVax Direct. Glioblastoma blastoma multiforme, the target of DCVax-L, is in the middle range in terms of mutational status.

The mutational status of cancers not only varies between the different types of cancers, it also varies within a certain type of cancer. While physicians might look at two patients and pronounce each as having melanoma, in reality they could be very different diseases because their cells have mutated differently and present different sets of antigens. If a therapy targets just one antigen, it could be of benefit for one patient whose cancer expresses that antigen and useless in another patient whose cancer does not express that antigen. The problem in designing immuno-therapies just doesn’t stop there; cancers evolve over time so that the antigens that are initially  expressed can change over time. The tumor mutates and that antigen is no longer expressed; then the therapy loses effectiveness. Finally, the set of antigens presented at one tumor site in a patient might be very different from those at another tumor site in the same patient’s body.

First Generation CAR-T Products are Also Autologous Cell Products but with Key Differences from Certain Dendritic Cell Vaccines; They Target Just One Antigen

In the case of the most advanced CAR-T cell products, production starts by collecting autologous T-cells through drawing blood from a patient, i.e. personalized medicine. However, the T-cell receptor that is genetically engineered to be expressed on the T-cell surface is specific to CD-19 and if a cancer does not express this antigen, the CAR-T cells can not recognize and attack those cancer cells.

It is the case that hematological cancers do express CD-19 on their cell surfaces (CAR-T cells can only address surface antigens) in great quantities.  Acute lymphocytic leukemia (ALL) is the perfect target for CAR-T products because of very high expression of CD19. This is why ALL is the lead cancer target for Novartis’ CAR-T product which is in phase 2 trial. ALL will also be the target for Juno’s lead product while Kite has chosen to direct its first phase 2 trial against diffuse large B-cell lymphoma which express CD-19 but not to the same extent as ALL.

The reason for Ms. Powers’ detailed explanation of the role of antigens in cancer immuno-therapy was to emphasize the potential advantage of dendritic cell vaccines as compared to the first generation CAR-T products. During its last roadshow, KITE management dismissed dendritic cell cancer vaccines and cancer vaccines in general as an old, flawed and failed technology. Ms. Powers seemed to respond indirectly to this comment by noting that three important things have to be accomplished with immuno-therapy approaches if they are to be effective: (1) the patient’s tumor must express the antigens that these drugs target, (2) because of the diversity of tumors, as  many antigens as possible must be targeted, in order to create maximum difficulty for the tumor to escape and (3) safety is often an issue when single agents are taken out of the immune system context and given in large doses as is the case with CAR-T.

CAR-T Products Have Safety Issues

In regard to safety, Ms. Powers commented that Northwest has conducted well over 1,200 rounds of patient treatments using its DCVax-L vaccines in approximately 300 patients and has only seen three serious adverse events. These were seizures which are a frequent occurrence in glioblastoma as the cancer squeezes the brain and were probably attributable to the tumor. Similarly, the common side effect of its DCVax vaccines is to create about a two degree increase in temperature Fahrenheit that lasts for two days and can be treated with aspirin or Tylenol.

Ms. Powers did not speak about the side effect issues of CAR-T cells, but side effects with CAR-T cells are much more onerous. Initial experience has shown that as many as 25% of patients develop serious grade 3/4 adverse events that can be life threatening and often require hospitalization.  The side effect issue with CAR-T may stem from giving ultra-high levels of killer T-cells as compared to level that might occur with a natural immune response. This leads to a dramatic effect on lysing the tumor but also leads to the creation of a cytokine storm that produces side effects.

CAR-T Results Have Been Striking

All of the above comments are not said to diminish the promise of CAR-T therapy. Ms. Powers noted that striking results have been seen in leukemias and lymphomas with CAR-T therapies. They have produced profound responses in patients who had failed virtually all available therapies. For example, Juno has reported that in an ongoing phase 1 trial of 27 evaluable adult patients with relapsed/refractory B cell acute lymphoblastic leukemia that their lead CAR-T product (there are two others) produced an 89% complete remission rate versus an expected 10% rate. These were patients who had failed all other therapeutic options.

Because of the biology of the tumor that makes CD19 easy to reach and is highly expressed, ALL is the most responsive of the B-cell tumors. However, 60% complete remission rates have been seen in refractory, relapsed lymphomas which are bulkier and more difficult to treat. Novartis has reported comparable results in ALL and Kite has provided striking data in diffuse large B-cell lymphoma, a form of non-Hodgkin’s lymphoma.

Manufacturing is A Key Issue

The final issue Ms. Powers touched on was manufacturing. She consistently emphasizes that with autologous living cell products that the manufacturing process is the product. A change in the manufacturing process could potentially result in a product with markedly different characteristics.Northwest has been perfecting its manufacturing for a decade. It used to take NWBO four to five months to produce a vaccine. They can now do this in 8 days. The manufacturing process has been used to produce vaccine for hundreds of patients in the US, UK and Germany. The product is cryopreserved which means that after the one production run, it is an off the shelf product for that patient. It is delivered to the site when needed, allowed to thaw and then injected. It is that simple.

In contrast, although Ms. Powers did not address Kite’s or Juno’s manufacturing, neither Kite nor Juno has ever manufactured products for a clinical trial. All of the manufacturing of their products that were used in phase 1 trials was done at either the National Cancer Institute or academic centers. These manufacturing processes are not applicable for use in clinical trials. I have heard that it can take several weeks to produce one dose of CAR-T. Both of these companies have considerable work ahead of them to develop a manufacturing process for their planned phase 2 trials.

There Could Be Future Trials of DCVax-L and DCVax-Direct Combined with a Checkpoint Modulator

Ms. Powers stated that she believes that DCVax-L and DCVax-Direct could be very complimentary with checkpoint inhibitors like Keytruda and Opdivo. The checkpoint inhibitors are only eliciting clinical responses in various advanced tumors in a range of 10% to 30% when used as monotherapy. The excitement with these agents is that in this modest percentage of patients the effects are durable. Used in combination, the response rate can be in the 45% range or more, but at the price of more troubling side effects.

Keytruda and Opdivo can enhance the T-cell response against cancer by T-cells that are already present in the body; but there has to be an immune response in the first place for them to be effective. The Northwest products lead to the activation of T-cells that can then differentiate into millions of clones that greatly enhance the immune response. It seems plausible that this will create synergy. Ms. Powers has previously indicated that the Company will be exploring possibilities for combination trials with one of the new checkpoint modulators.



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  1. Larry: As recently as November 20th, you’ve written that you expected the Phase III data to become public in the second half of 2015. Does “early 2016” imply that you are aware of some delays or is this little more than a minor ’rounding’ change?

    As usual great information!

  2. Rounding error.

  3. Reading your articles is an education in itself, Larry. Your backgrounding alone makes it worth the read. My faith in NWBO is reaffirmed. Thanks!

  4. Larry,

    As always very interesting and informative. My understanding is that results from the DC-Direct Phase 1 trial at M.D. Anderson will be released in either late Feb. or in March. Is this correct?

    Secondly on the UCLA Neurosurgery website it says DCVax “…is on the road to FDA approval”. Do you have any comment on this? Website link is:


  5. The end of the trial occurs six months after the treatment of the last enrollee which is March. However, it could take some time to collect and analyze the data. In addition, it is likely that some of the pateints will be followed for some time thereafter creating the potential for more mature data later in 2015.

  6. Great article Larry…..As always I am encouraged by your intense insights and opinions on what could be the break-through many cancer patients are hoping for…..The article by the Chairperson of the UCLA institution is really mind boggling to me, as I wonder why would he say all those wonderful possibilities that “L” is showing to him, if it were not really true???? I know it a blinded test, but I guess he thinks it is well on its way to approval and has the potential to do many amazing things that he high-lighted…I will listen in on Monday and see if Linda gives us any other food for thought….Wouldn’t it be wonderful if she also added some real results or “new” news…..I will “stay tuned” and stay long…I wish Steve, Doc, and some other commenters would also listen in and respond to what they hear…..I wish I could add something of substance to this discussion, but I just add my prayers…..Keep digging out and please, keep following up on NWBO’S announcements…
    Thanks and cheers


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