Northwest Bio (NWBO) has a real chance of hitting its Primary Endpoint

                                                                                                                                                                    **chart update 22nd Jun'17

I re-ran my DCVax-L Progression Free Survival (PFS) model with updated assumptions from last week's ASCO presentation.

My model now gives DCVax-L a 14 month mPFS vs 7 months for its placebo thereby providing a 6 month treatment advantage (measured from time of treatment). This trial requires a 4 to 5 month treatment advantage to demonstrate statistical significance.

Previously my model gave DCVax-L a 16 month mPFS vs 6 months for placebo. The main reason for my now lower estimated PFS number is that I increased the efficacy curve of the placebo arm. I made this change based on Dr Bosch’s statement at ASCO that ~90% of all trial patients have received DCVax-L treatment either upfront or at cross-over. Previously, around December 2016, Principle Investigator, Dr. Linda Liau stated 86% of patients have received DCVax-L treatment. So it can be inferred that during the past 6 months ~12 additional placebo patients may have experienced PFS events. It is possible Dr. Bosch's ~90% figure is the same as Dr. Liau's 86%, in this case the trial's chance of success improves significantly.

Changes to my modal -
* updated enrollment ramp numbers (extrapolated from ASCO slide)
* broke-down my K-M curve points into 6 month increments
* added 6 patients as Lost to Follow-up (LTFU)
* made Dec’16 the date 248 PFS events hit
* assumed 16 placebo had not evented at Dec’16

Highlights from ASCO presentation:

DCVax-L Program -
 * Efficacy determination is made by a central review process

* 90% of pts received L (LL said 86%?)

* trial is powered both for PFS and OS independently

* ~3 month period btw screening and treatment

* pseudo progressors not mentioned in exclusion criteria

* 80-80% cell purity required to produce vaccine

* a few patients were lost to follow-up

* enrollment midpoint hit in May2014

* fully enrolled in November2015

* 231 pts have evented

* OS 233 event expected to be hit around mid July

* preliminary analysis publication of results is in the works

* 7 SAEs related to L or placebo

* 132 SAEs related to GBM or SOC

* SOC expected OS 15 -17 mths from diagnosis

DCVax-L Information Arm:

* Dr B said most indeterminate patients are probably rapids with a few pseudos (LL said the opposite)

* mOS of this group was 21.5 mths

* 24% > 48 mths OS

* 40% > 35 mths OS

DCVax-Direct Highlights:

* Sarcoma Phase2 trial to open in several months

* plan to expand this trial for pediatric patients

* Phase 2 trials to include CI in indications where they are approved already

* 7 of 8 PH1 sarcoma pts exceeded their expected survival times

* PH1 survival times 18% > 30 mths, 23% > 24 mths

* 59% exceeded their expected survival time by an average of 11 mths

* 4 SAEs * Direct is manufactured in an automated system

NWBO is in a very distressed financial state. The company has ~$6.5M debts due in late June. Investors may suffer substantial dilution when this debt is settled.

Disclosure - I am long NWBO, I do not short stocks.

Northwest Bio (NWBO) may become the biggest biotech winner of 2017 with positive Phase3 data in the coming months. Understand the risks it may also be a 0.

Disclosure - I am long NWBO. I do not short stocks

Northwest Bio (NWBO) improves fundamentals

Northwest Biotherapeutics (NWBO) significantly improved its fundamentals last week by announcing the lifting of a clinical hold from its lead DCVax-L Phase 3 trial for Glioblastoma (GBM). Also announced was the Phase 3 had reached the threshold number of Progression Free Survival (PFS) events, and the trial was several months away from reaching the threshold number of Overall Survival (OS) events. This trial is now fully enrolled with 331 patients and moving forward towards data lock.

These recent positive developments have significantly improved the outlook for NWBO and reduced their risks. After the partial clinical hold was instated in August 2015, NWBO’s trial was perceived to be very troubled. There were perceptions the partial hold would not get lifted and as a result the trial could not complete enrollment and reach its endpoints. There were also doubts NWBO could remain solvent while waiting for the trial to complete.

The latest announcement removes most of those risks. Whatever problem caused the partial hold, while still unknown, cannot now be a problem since the partial hold was lifted. The Phase 3 trial is now fully enrolled and within months of data-lock so the risks the company becomes insolvent and their trial never finishing are also gone.

NWBO is a small biotechnology company in the Immuno-Oncology space. They have two promising vaccine candidates for treating solid tumor cancers. DCVax-L is their lead candidate. Their other candidate is DCVax-Direct for treating various inoperable cancers; this program has completed portion1 of a Phase 1/2 trial and is expected to begin the portion 2 in the near future.

NWBO’s approach to treating cancer is exciting and can theoretically be used to treat ALL solid cancers. They claim their dendritic cell vaccine platform aspires to educate and direct the human immune system to identify, find, and destroy all cancer cells. NWBO’s vaccines are also meant to leave behind an immune memory so when cancer cells try returning they are also destroyed. Other immunotherapy companies fight cancer by targeting a single or several know cancer cells. 

The partial clinical hold, instated 18 months ago, was probably the main cause for NWBO’s share price collapse. The company’s market cap dropped from a lofty +$900M to today’s $65M, thereby pricing the Phase 3 trial as a complete failure. Despite the recent positive announcements NWBO's share price remained unchanged. Given the improved fundamentals I see this stock as excessively under-valued.

Unfortunately, the latest announcement does not explain what the partial clinical hold was about. This hurts NWBO management’s credibility and probably keeps new investors away. This perceived management lack of transparency is damaging for NWBO and undoubtedly suppressing its stock’s share price. NWBO had previously said they will not discuss the nature of the partial hold while they are in on-going dialog with regulators. I suspect the dialog with regulators has not completed so there may be good reasons and justification for the continued silence.

NWBO stated they are several months from data-lock in this Phase 3. After data-lock there should be no reason to withhold the partial hold explanation. An explanation would improve investor confidence.

It’s unlikely there ever were serious problems with this trial because during the clinical hold period the trial remained on-going, it was not halted by the FDA. Patients continued to receive their vaccine treatments which would not have been allowed by the FDA had there actually been serious problems.

Another perceived risk with this Phase 3 trial is whether DCVax-L has a chance of showing statistically significant efficacy. I believe it can and rate DCVax-L as having a high likelihood of success. DCVax-L produced very promising results in earlier clinical studies showing both strong signals of efficacy and an excellent safety profile without chemo/radiation type side-effects. Those studies however were small in size and were susceptible to patient selection bias.

DCVax-L has also shown enough promise for foreign regulators to approval it for compassionate use in Germany and its being considered for early approval in the UK. According to NWBO’s latest 8K, a substantial number of patients have already been treated on a compassionate basis under an Expanded Access Protocol.

I have run several analyses to try and predict the efficacy of this Phase 3 trial based on assumptions I have created from my knowledge of the trial. My analysis results give DCVax-L a strong possibility of showing statistically significant efficacy on their PFS primary endpoint. My model below gives DCVax-L 16 month PFS versus 6 months for placebo, a 10 month treatment benefit.

DCVax-L is further validated by being included in combination trials with FDA approved Checkpoint Inhibitors (CI). At least two Phase 2 combination trials are planned for 2017. Already announced is a trial with Merck’s (MRK) Keytruda for colorectal cancer. And the second, unannounced but listed on clinicaltrials.gov, is a trial with Bristol-Myers’ (BMY) Opdivo for recurrent GBM. Both these trials are no longer at risk of being delayed by the partial clinical hold.

For the risk-averse investor this stock at $65M market cap now presents a tremendous near-term, risk/reward profile.



Other Risks:
* Should this Phase 3 trial fail, it may become very difficult for NWBO to remain solvent.
* NWBO will require more funding around mid-2017 and it may come under dilutive terms.
ADDED - Additional funding may be required before 10th of March 2017 should the company be required to repurchase 11M in Convertible Senior Notes
* There is uncertainty about the intentions of NWBO’s major stakeholder Neil Woodford. His relationship with NWBO appears hostile or strained at best.
* NWBO continues to be targeted in the media despite its very low valuation.


Disclosure:
I am long NWBO. I do not short stocks.

My Northwest Biotherapeutics (NWBO) PFS estimated Kaplan-Meier Chart

Below is a copy of my analysis on NWBO's Phase3 clinical trial that I posted on Twitter back at the beginning of January 2017.
My analysis predicted a likely positive outcome for the trial's primary endpoint of Progression Free Survival (PFS).

Assumptions -
* 248 Progression Free Survival (PFS) events for primary endpoint have NOT been reached as of Dec'16.
* All Placebo patients have PFS evented (per L Liau SSF video).
* 331 patients enrolled in trial with a 2:1 treatment to placebo ratio
* Enrollment Ramp -> 91 patients between Oct'14 & Oct'15, 70 patients between Jan'14 & Sep'14, and 170 patients between Dec'13 & 2011 (thx to ihubbers RKM & FLP44 for sharing)
* Last patient enrolled Oct'15
* Placebo will perform similar to Stupp (Dose-Dense) Study but without the long survival tail because pseudo Progression patients were excluded from NWBO's study.
* pseudo Progression patients mostly make-up the long tail survivors in GBM, they make-up ~25% of the GBM population.
* NWBO's study population has better patient prognostics including more tumor resection & higher patient KPS but its PFS measure begins later.
* A 4 to 5 month efficacy benefit is required to show statistical significance
* After crunching through the numbers, NWBO's Phase3 trial gets a positive figure of 16 month PFS vs 6 months for placebo.

* my PFS measurements are from time of treatment.
Disclosure - I am long NWBO. I do not short stocks.

My 2017 & 2018 top stock recommendations - NWBO & TGTX

For investors who can tolerate high risk I am recommending biotech stocks Northwest Biotherapeutics (NWBO) and TG Therapeutics (TGTX). Both companies are developing cancer treatments that are showing very promising efficacy with excellent safety profiles. Both these stocks have an enormous market potential while their current share prices are beaten down in value. With clinical successes in 2017 & 2018 both these stocks have potential to become multi-baggers.

Another look at Northwest Bio's (NWBO) Phase 3 trial - still predicts success

Below is my analysis for trying to predict the outcome of Northwest Bio's (NWBO) Phase 3 trial. I ran this analysis after learning that NWBO have changed their trial's estimated primary completion date at clinicaltrials.gov. The date was moved back from Sept'16 to Nov'16. Now suggesting NWBO believes their trial will reach its primary completion date in Nov'16. I added this new date as an assumption in my model and then re-ran the analysis.

My analysis now gives NWBO's DCVax-L a 14 month mPFS vs 8 month for its control. This gives DCVax-L a 6 month benefit which is larger than the 4 month benefit required to show statistical significance.

This new analysis uses an 8 month SOC PFS assumption and an enrollment ramp assumption (generated by i-hubbers Flipper44 & Rkmatters).

I created this simple model to try and predict how NWBO’s Phase 3 clinical trial is performing.
I consider this model at best a “rough-estimate”, from an engineer’s perspective (not a mathematician). 

I used the Dose-Dense Temozolomide for newly diagnosed Glioblastoma study (D-D) as a foundation for this model. NWBO’s vaccine (DCVax-L) is getting compared to today’s SOC which is this D-D study (Arm1). The D-D study examined an increased chemotherapy dosing schedule to the original Stupp SOC. This study showed no efficacy statistical difference between the two treatments.

My model begins by assuming NWBO’s vaccine is ineffective, meaning that it has the same efficacy as the D-D study. The model uses the D-D study’s Kaplan-Meier chart (K-M) to estimate when NWBO’s trial can be expected to reach its primary completion date. Note, NWBO’s trial has not reached its primary completion dated, it is “on-going” and “nearing completion” according to the company’s more recent statements. In early Oct'16 the trial's primary completion date was moved to Nov'16 suggesting the company expects 248 PFS events to occur around that date.

I made a change to the D-D K-M chart so that it better represents NWBO’s trial patient population. The D-D study included a class of patients know as pseudo progressive (psPD) whereas the NWBO trial has excluded these patients. PsPD patients are believed to be the best GBM survivors and can make-up over 20% of the entire GBM population. So for my analysis I have disregarded the 15% longest survivors from the D-D study, assuming they will mainly be psPD patients.

I used publicly shared enrollment ramps from i-hubbers Rkmatters & Flipper44. With the enrollment ramp information and the PFS rates from the D-D K-M chart I was able to determine patient expected survival times. Using those survival time, I could then calculated the expected trial primary completion date, 248 PFS events. This would be the point at which the trial would end had all patients only received SOC treatment, note the trial has not reached its completion date as of Oct'16. 

Should NWBO's trial reach its primary completion date in November 2016, my model gives NWBO a 14 month advantage over the D-D study.

However NWBO’s advantage is made-up from two portions, its treatment (DCVax-L) and its control. 

To determine the benefit from the treatment portion of the trial an assumption was made about the benefit from the control portion. I have given NWBO's control an 8 months median PFS time which is longer than the D-D study's 5.5 months. 

My reasoning for expecting longer PFS in NWBO's trial is based on the fact their patients have better outcome prognostics ie more tumor removed, higher KPS etc. 

NWBO control patients are likely to see survival times closer to the Celldex's Rintega nGBM trial where all patients received complete tumor resections. Unfortunately Celldex has not shared their trial's K-M PFS data but they have shared their overall survival data. Rintega patient's median overall survival improved by around 40% from historical studies, 21months vs 15 months. Assuming PFS also improves by a similar 40% then NWBO's control can expect to have an 8 month mPFS (5.5 x 1.4 = ~8).

Using NWBO’s trial randomization ratio and an 8 months mPFS assumption for its control I was able to calculated the likely DCVax-L mPFS benefit (1/3 * 8 + 2/3 * DCVax-L = 12).

My model gives DCVax-L a 14 months mPFS vs 8 months for its control. So DCVax-L has a 6 month benefit which is larger than the 4 month benefit required to show statistical significance.

Disclosure - I am long NWBO. I do not short stocks.

My small cap Healthcare investment ideas

Here are some Healthcare investment ideas from my Fund holdings as at the end of September 2016:

Note - most of these stocks are very risky. My fund is down 33% ytd with a 9.2% annualized 10 year return.