What: Shares of the developmental-stage immunotherapy company Northwest Biotherapeutics (OTC:NWBO) climbed by over 15% in July, despite a bevy of macroeconomic headwinds that pushed most small-cap healthcare stocks lower for the month. 

NWBO Chart

NWBO data by YCharts.

While there weren't any specific catalysts behind this jump last month, the stock has been rising ever since its clinical update at the American Association for Cancer Research Annual Meeting last April, where the company gave an overview of its DCVax-L for Glioblastoma multiforme (GBM) brain cancer and DCVax-Direct for all types of inoperable solid tumors clinical programs. In a nutshell, the company's dendritic cell vaccine platform appears to be progressing nicely. 

So what: The late-stage brain cancer vaccine DCVAX-L could be a make or break product for the company because Northwest has a serious cash problem, attracting short sellers in droves. Specifically, the company is presently burning about $8 million a month, forcing it to continually issue shares to its major debt holders like Cognate Bioservices, helping to drive the short float over 18% at last count. Perhaps most concerning is that Northwest exited the second quarter with only $19.2 million in cash and cash equivalents, giving it a cash runway of less than three months at its current burn rate.

Now what: GBM is a notoriously stubborn form of brain cancer that has proven resistant to basically every form of experimental treatment to date, although Roche's Avastin does provides a minimal clinical benefit in terms of slowing disease progression in newly diagnosed patients. As a result, bigger pharmas haven't shown much interest in partnering with Northwest for DCVax-L, leading in many ways to the biotech's precarious financial position. 

Looking ahead, Northwest is almost certainly going to resort to more dilutive financing soon to shore up its balance sheet, and it's unclear just how much cash it's going to have to raise. That's why I don't think now is the time to buy shares in this high-risk biotech.