Northwest Biotherapeutics: Blinded By The Dazzle Of The Unblinding

I wrote a piece on Northwest Bio (OTCQB:NWBO) on Nov. 27, 2018, where I said I expected them to unblind their phase 3 glioblastoma trial of DCVax-L “in another few months.” I also said it was a battleground stock, fiercely fought over by street bulls and bears, with allegations and counter allegations and even the FBI thrown in.

The entire 2019 passed, and not a single article was written about NWBO on Seeking Alpha, possibly because the trial was never unblinded. Then a few articles were written in 2020, but the data was still not unblinded.

Finally, on Oct. 5, 2020, NWBO declared that data from the phase 3 study has been locked. That means data will now finally be unblinded for statisticians working on the trial:

With the database now locked, the independent service firms managing the Clinical Trial are arranging for the independent statisticians to have access to the unblinded raw data from the Trial. Neither the Company nor any party other than the independent statisticians will have access to any unblinded data at this stage.

So, while we still do not know when we, the investors, will be able to see this data, this is progress. In an earlier press release, NWBO suggested that “within a couple of weeks” of submission the statisticians should complete their work. “Only then will the company be unblinded to the data.”

What took so long?

If you recall from your study of this company, they were waiting for the 233rd death to occur out of 331 patients to calculate whether DCVax-L has any survival benefit. That event took much longer than anticipated, and was the reason for the delay.

Let me go back and recapitulate everything in the clearest language possible for everyone.

The DCVax-L story

The DCVax-L trial was started 18 years ago as a phase 2 trial that morphed into a phase 3 trial. This is an immunotherapy vaccine that's targeting glioblastoma, the deadliest of all cancers, where 100s of trials have failed.

The trial had 331 patients in all, and its design was such that 67% of all patients were to receive DCVax-L after initial standard of care, which was originally radiation and Temodar therapy, but also later included Optune. This number was later to become 90% of all patients receiving DCVax-L because of the following provision of the trial:

Patients will receive the standard of care, including radiation and Temodar therapy and two out of three will additionally receive DCVax-L, with the remaining one third receiving a placebo. Patients randomized to the placebo arm will have the option to receive DCVax-L in a crossover arm upon documented disease progression.

These sorts of trials in high-risk diseases are supposed to do interim analysis to see if the drug has any treatment benefit or if the patients are at risk of wasting valuable time by taking it. The trial could be stopped midway for two reasons - obvious treatment benefit, in which case it makes no ethical sense to deprive placebo-receivers or others of the drug, or obvious lack of benefit, in which case it makes no sense to let drug-arm subjects continue with what amounts to a wasteful effort.

They did two interim analyses in 2017 and 2018, but neither of the above two happened. That meant the reviewers were not able to conclude at those points of time whether the drug had any benefit, or none.

Another very interesting thing to note: The interim analyses were blinded. That means, while they saw that patients in the trial survived for a median of 23.1 months at that time (34.7 for patients with a methylated MGMT gene, which is present in 40% GBM patients), which is a vast improvement over historical rates (of 19.6 months for TMZ+Optune and 15.2 months for TMZ alone, see here), they could not know which patients survived longer, SoC+placebo patients or SoC+DCVax-L patients.

Why can’t you make a guess about that? Because enrollment criteria varies from trial to trial, and this trial had patients whose enrollment criteria was that, first, they had to have surgical resection followed by radiation therapy, and two, that they must have been progression free after radiation therapy. That means NWBO chose patients with somewhat better prognosis than usual, so, although improbable, it's not impossible that the placebo group was pushing the median OS higher than usual. That doubt makes it inconclusive.

So the trial continued, and was only locked in October this year after the 233rd death event had occurred.

Another angle here, like I said before, is that per the trial design, a much larger number of trial patients were going to be given DCVax-L than placebo. Therefore, the likelihood of the placebo arm pushing the media OS higher in 2017/18 and even higher today is very low. The SoC had to have been unbelievably effective in order for that to have happened. That eventuality is not without precedent, but, at least according to the bulls, highly unlikely.

The main bearish arguments are circumstantial. The first argument says that there are examples of such delayed trials which turned out to be flops. The second argument points to the admittedly weird behavior of NWBO management time and again in hiding, obfuscating, confusing and generally being confounding with updates.

When can we see the data?

According to one reference, NWBO is taking a lot of time to analyse the data because, due to the long age of the trial, a lot of new developments have taken place in GBM science that has to be accounted for. For example, it's been discovered in the last few years that wild-type IDH is oncogenic, while mutant IDH genes have better prognosis in early stage gliomas, which, although they are relatively rare in glioblastoma, about 10%, is probably having to be factored into the NWBO data. These things are delaying the analysis. Several slots were booked in major conferences but later cancelled by the company. They also may publish the data in a journal first.

Bottom line

It should be understood that this article barely touches on the vast NWBO story. I haven’t even discussed the earlier 20-person data that started it all, or the interim blinded data that sparked further interest. Some of that has been covered in my two-year old article.

As to cash, the company is perpetually on the brink of bankruptcy because it has been running this enormously long trial for so many years. Detractors also say that mismanagement by Linda Powers, CEO, is responsible for some of it. I have provided links to resources discussing these things. Currently, they have around $5.6mn in cash as of the last reported quarter. Right before the data unlock, they have raised capital in two tranches of $5mn and $8mn.

They also recently acquired a small company that will “enable substantial scale-up of production volumes of DCVax products and substantial reduction of production costs.” This also excited investors because why would a company spend $4.6mn of cash they don’t have in such acquisitions unless they think they can bring a product to market soon?

Given all that, I think a small investment at current prices may be a smart idea in advance of one of the most interesting binary events in biopharma.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in NWBO over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.