Why Northwest Biotherapeutics Inc. Shares Swooned

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of the recently volatile Northwest Biotherapeutics (NASDAQ: NWBO  ) , a clinical-stage biopharmaceutical company developing immunotherapeutic options to treat cancer, dipped as much as 21% after receiving a downgrade before the opening bell.

So what: Research firm Oppenheimer dropped Northwest Biotherapeutics, known also as NW Bio, to perform from outperform, with valuation cited as the primary concern. Oppenheimer said it believes the recent run-up has fairly valued NW Bio's assets, including its DCVax immunotherapeutic pipeline.

If you recall, this week's stock rise came on the heels of two special approvals in Germany -- a hospital exemption and approval for insurance reimbursement -- which will allow DCVax-L to be given to German patients with glioma brain cancers. In return, NW Bio will be able to charge a full price for the medication and be reimbursed through sickness funds (i.e., insurance companies). DCVax-L is being tested in a phase 3 trial in the U.S. for glioblastoma multiforme, or GBM, the most lethal form of brain cancer, but the German five-year approval allows DCVax-L to be used on all glioma brain cancers in that country.

Now what: I'm certainly not surprised to see the downgrade after the monstrous run NW Bio had from receiving what amounts to a temporary approval in Germany. I continue to believe that its U.S. phase 3 study is what will matter most, since analysts will be looking toward the strictly regulated Food and Drug Administration for direction as to DCVax-L's potential, at least in treating GBM. This isn't to say that NW Bio isn't headed in the right direction with its pipeline, or that some move higher wasn't due given its two special exemptions, but the upside appeared very limited following its recent two-day move higher.

Northwest Biotherapeutics has soared this year -- but even it may struggle to keep up with this top stock when all is said and done
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  • Report this Comment On March 12, 2014, at 1:41 PM, bioinfo wrote:

    Motleyfool says reason for pullback is downgrage by Oppenheimer citing valuation. fools are 100% fools and so is Oppenheimer.

    Germany is paying under reimbursement 100% of what NWBO would charge, there are 12,000 patients annuanlly diagnosed with GBM in Germany. slam dunk!

    anticipation is cost of $50K to $100K, being negotiated. lets assume $50K (low end), that is $50K x 12,000 = $600M/year.

    screw fools and screw AF and others who doubt NWBO. We dont even need FDA here for a while and we will be making this money. Chemo costs $75K. this treatment is going to be life saver. 100% money maker! plus other EU countries may join in too. this figure does not include others who can seek treatmnt and pay for it.

    Fools need to do better job in their own analysis as suppose to simply post Oppenheimer's thoughts! Its laughable.

  • Report this Comment On March 12, 2014, at 5:02 PM, Ballchinnian wrote:

    I listened to Boris Peaker of Oppenheimer asking questions on the Nov 21, 2013 Oncolytics Biotech conference call. Unfortunately, it was quite clear from his clueless questions that he was not at all familiar with the company's previous conference calls on their clinical program. It is disturbing to ponder whether the above article is correct in asserting that Oppenheimer's upgrades or downgrades actually can move share price. Development stage biotechs depend on the stock market when it comes to raising capital, and they are an absolutely essential for drug development.

  • Report this Comment On March 12, 2014, at 8:45 PM, cgillit wrote:

    At this point the FDA approval is almost superflous. If you are an American diagnosed with a GBM, you are flying to Germany for a DCVax treatment as soon as possible. Your other option is to stay in America, where your oncologist will put you on an unbelievably caustic and toxic mix of chemotherapy treatments, blindly throwing things against the wall on the small, dismall chance that it will extend your survival time from 10 months to 14 months.

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Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

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