DEDUCED RECKONING: Northwest Bio reports Phase 3 results. So what could go wrong?
I’m writing this from New York where I attended the New York Academy of Sciences seventh annual Oncology Conference: Frontiers in Cancer Immunology. FYI, the NYAS is over 200 years old and counts among its past members Thomas Jefferson, James Madison, Thomas Alva Edison, Alexander Graham Bell, Albert Einstein and more recently, a host of Nobel laureates. This progressive institution began accepting women as members in 1877! What a great venue for Dr. Linda Liau, Northwest Bio’s lead investigator of its DCVAX-L drug, to finally present the Top Line Data for its 15-year Phase 3 study in glioblastoma.
You already know from the rapid deaths of Ted Kennedy, John McCain and Beau Biden, the average person who contracts glioblastoma lives only 15-17 months. Merck’s highly toxic Temodar was approved 17 years ago as the standard of care for newly diagnosed cases following resection of the tumor (its surgical removal) and radiation because it added two months to that number. Since then, over 400 drug trials have failed in their goals to increase life expectancy for this toughest to cure of all cancers. Almost 100% of patients have a recurrence within a year. There really is no approved treatment now for them but this drug helped recurrent patients, also.
Only 5% of glio patients survive for five years. So how stunning is it for DCVAX-L to see life expectancy at 60 months rise from 5.7% to 13%, an increase of 228%. Some patients have seen total remission glio and are cancer free more than a decade after treatment. For example, Brad Silver participated in the Phase 1 trial 17 years ago and is cancer free now.
So what could go wrong after this fabulous news to cause the stock to tank immediately after these results were made public?
1. Dr. Liau was in the UK last week and contracted COVID over the weekend. Determined that the show go on anyway, Dr. Paul Mulholland of the University College Hospital agreed to stand in and make the presentation on Zoom. He has been part of the trial and the preparation of the journal article explaining all this data, which should be forthcoming soon.
2. We are clearly in the midst of a nasty bear market, especially for NASDAQ companies. The NASDAQ is down 25% so far this year and the NASDAQ 100, which includes the big tech names that until recently have held the markets up, is off 24%. Small cap stocks like this one have suffered even more. NWBO trades on the OTCMKTS, where it is easily manipulated by large players who want to run a stock in either direction.
3. We know by the way stocks zoom and crash these days that market liquidity is sorely lacking. Companies routinely rise and fall by vast percentages in no time flat. Market makers do not want to step up and “position” a stock on its books in such a volatile environment. Typically, NWBO trades 1-2 million shares per day. The day of this announcement, it traded 77 million shares. Essentially it became a meme stock. It also doubled last week.
4. One well-known bear on this company was busy publishing falsehoods about NWBO for the last several days.
The great news is that NWBO’s quiet period is over so it can now fight back with some important announcements of combo trials with other drugs. It will be presenting at ASCO the first weekend in June, just three weeks away. We await the journal article, and the company’s annual meeting, also in June. It’s a wild ride but hang on. The results were terrific.
Joan Lappin CFA has been called an “investment guru” by Business Week and a “top manager” by the Wall Street Journal. The Sarasota resident founded Gramercy Capital Management, a registered investment adviser, in 1986. Email JLappincfa@gmail.com. Follow her on twitter: @joanlappin. Her past columns appear at heraldtribune.com/business/columns.
This article originally appeared on Sarasota Herald-Tribune: JOAN LAPPIN: Northwest Bio reports promising Phase 3 results
