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Northwest Biotherapeutics (OTCQB:NWBO) just released its 10-K. Investors have a major problem with NWBO – after 16 months of data lock, there’s very little information available on TLD or topline data. So I took the latest 10-K and the one from last year, put them in a PDF comparison tool, and tried to see in a direct and understandable manner what has changed at the company in the last one year. This article will mostly discuss those changes and the latest update about the compassionate use patient at their Sawston facility.
To give you an idea of how the system works, here’s a sentence from this year’s 10-K:
Key experts at certain specialized service providers have been unavailable for periods of time.
If you look at the same sentence from the previous year’s 10-K:
Key experts at certain specialized service providers have been unavailable for periods of time due to illness in their family.
So we can understand that those people that were ill are not so any longer, however, the problem with unavailability persists, one way or the other. To do this sort of analysis manually would have taken hours. The tool makes it quicker. Let me now look for major changes here, ones that reflect what the company has been doing, if anything, in the past year.
So, about the Sawston facility, here’s what 2021 said:
The final stage of development of the initial production capacity (the Performance Qualification stage) is under way, and when that stage is completed it is anticipated that an application for certification of the facility will be submitted to the UK regulatory authority.
And here’s 2022:
The buildout of Phase 1A of the facility was completed in Q4 2020.
So the Sawston facility is now operational. This is something that they have accomplished this year. Sawston, some have alleged, is owned by Ms. Linda Powers through Advent via Toucan Capital:
In addition, a former Cognate affiliate in the UK (which was formerly part of Cognate BioServices, and is now known as Advent BioServices, a related party relationship to the Company) is preparing for production of DCVax-L products there. The Company and Advent BioServices are in the process of developing contract arrangements for manufacturing and related services for the U.K. and Europe.
According to chatter on social media, Ms. Powers owns Sawston. However, note that in 2018 the company did say:
Northwest Biotherapeutics … congratulated Cognate BioServices, the contract manufacturer of NWBio’s DCVax® products, on the Management Buyout of Cognate supported by global institutional investors, which Cognate announced today.
Following this transaction, neither Linda Powers nor any Toucan Capital related entities have any ownership interest in Cognate or any role on Cognate’s Board.
So we need to dig deeper to figure out the relationship between Sawston and Ms. Powers. Neither time nor ability have I.
In 2022, the company said:
During 2021, work continued for technology transfer from the London facility to the Sawston facility, recruitment of contract technical personnel for Sawston, development of some 1,000 regulatory documents for operations in the Sawston facility, and applications to both the Human Tissue Authority (HTA) and the MHRA for inspections of the Sawston facility and its operations, and issuance of licenses for manufacturing in the facility. These applications and inspections were successfully completed. The HTA license was issued in October 2021 and the MHRA license was issued in December 2021. Following some required validation work after the licenses were issued, production of DCVax-L began this month.
This is the major news from NWBO this month. The phase 1A of the facility has a production capacity to produce cancer vaccines for 400-500 patients per year. They began production of a single compassionate use patient’s vaccine in February. Which kind of begs the question – where is TLD? It has been 16 months since the data lock. What is the use of building such a high-capacity facility even before DCVax-L is approved?
An answer seems to emerge from what is said in the 10-K next:
The initial production capacity will occupy only a small fraction of the total space in the Sawston facility. In light of this, and in light of our obligation in connection with the buildout loan from the Cambridge development authority to make the Sawston facility benefit the regional business ecosystem and not just us, on December 31, 2021 we entered into a sub-lease for a small portion of the space to our contract manufacturer, Advent BioServices. For further details, please see Note 10 below. It is anticipated that, as and when feasible, the subleased space may enable some production of third party cell therapy products Such production of other products will fulfill the loan-related commitment to the Cambridge authority, will help support the capital-intensive Sawston facility costs and, in light of the growing demand for cell therapy manufacturing capacity, could substantially increase the asset value of the Sawston facility.
So Sawston is built out of a loan taken by NWBO, whose CEO is Ms. Powers, and a “portion” of it is being rented out to Advent, which may or may not be owned by Ms. Powers.
The changes in the two documents end with an update on new patents from Flashworks, and a “material weakness” that was mentioned in 2021 but not this year.
Financials
NWBO today has a market cap of $844mn, it is trading at around 80 cents, and the company’s cash balance is about $15mn, on a pro forma basis. Here’s some detail on a new $15mn loan they received:
On November 22, 2021, Northwest Biotherapeutics, Inc. (the “Company”) entered into a loan financing with Streeterville Capital, LLC (the “Lender”) pursuant to which the Company received net proceeds of $15,000,000 (the “Loan”). The Loan has a maturity of 22 months. No payments are due for the first 8 months of the Loan term. …Upon announcement of the top line data (“TLD”) from the Company’s Phase III clinical trial of DCVax®-L for glioblastoma brain cancer, the Lender has a then springing right to exchange the outstanding balance of the loan for common shares priced at the price of the first private placement transaction following TLD less a 12% discount and to purchase another 50% of that number of shares at the same price. This then-springing right expires 14 days after the post-TLD private placement.
Apart from the loan, which gives them a lifeline, what’s interesting is that text about “announcement of TLD.” So they get a chance to ease out of the loan and transform that into equity once they announce topline data. I hope that will give them added initiative.
Bottom line
Like I said earlier, I hold a small position in this stock, and its value fell considerably in December, but now has improved somewhat. I am still in the red, and I don’t plan to double down or sell. I will simply hold on to that small position and see how things turn out – whether NWBO turns out to be the biggest scam in sector history, milking millions from the market over a medicine that neither works nor will it ever declare topline data; or whether we get a medicine that works for those glioblastoma patients.
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