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A Dendritic Cell Cancer Vaccine Shines

Brighter for Glioblastoma Patients

Northwest Biotherapeutics Update from District 2 Capital
Carlo Rago, PhD
May 19th 2019


• Survival results for the blinded interim analysis compare favorably to SOC and other materially related
• Survival results for the blinded interim analysis improved with additional follow-up from 2017 to 2018
• The mOS delta between MGMT-M and MGMT-U expanded with additional follow-up
• The top 100 patients’ mOS improved to 58.4 months and the “majority” of this group did not progress
• Progress from independent labs with dendritic cell vaccines in various cancers including GBM
• Progress from independent labs with checkpoint inhibitors in GBM
• Updates at ASCO may include greater clarity on SAP progress, initiation of Phase II combo trials, and
timing of top line data etc.

Table of Contents

• Introduction
• Original Investment Thesis: Recap of 2018 White paper
• New Information and Analysis
• Potential Valuation of NWBO
• Genesis of Current Opportunity
• Potential Milestones and Catalysts at ASCO 2019
• Summary
• Disclosures
• About the Author
• References


On November 15, 2018 we published a white paper1 in support of the science behind NWBOs dendritic cell (DC)
vaccine, DCVax-L. In that paper, we laid out main pillars to the value proposition. A recent press release from
NWBO provided guidance on progress and a loose framework for expectations of key milestones and catalysts.
Recently, Dr. Linda Liau, Chair of the Department of Neurosurgery at UCLA, gave presentations that both
corroborate and enhance our original thesis. We believe the commercial implications of the blinded interim safety,
feasibility, and efficacy results are compelling and the scheduled June 2nd ASCO 2019 presentation by NWBO could
provide important updates.

Original Investment Thesis

1. A mOS of 23.1 months for the entire ITT population (n=331) in the interim analysis of the DCVax-L Phase
III trial in newly diagnosed GBM patients suggests there may be a minimum benefit of 3 months (when
adjusted for time-to-surgery) compared to SOC published by Stupp et al in 2009, which showed a mOS of
14.6 months. The mOS results for the MGMT-Methylated (34.7 vs 23.4 months) and MGMT-
Unmethylated (19.8 vs 12.6 months) groups also suggest DCVax-L may provide meaningful benefit when
comparing the overall intent-to-treat (ITT) population in the DCVax-L trial to the Stupp SOC results from
2009, respectively.
2. Importantly, the DCVax-L interim analysis was on the entire population, which included treated, delayed-
treated (i.e. crossed-over), and untreated patients, so we expect the potential benefit of DCVax-L to further
improve when the data is unblinded and analyzed. Furthermore, we predicted the results would improve
with additional follow-up as censored patients (especially where a drug is working) may often
underestimate benefit as they are omitted from the numerator of Kaplan-Meier analyses. Although some of
these patients may still be alive, their potential positive effect on the statistics regarding efficacy of
DCVax-L is not known until follow-up in the future.

3. A molecular clue that the DCVax-L mechanism may be operable was provided by the increased shift in the
mOS delta between MGMT-M and MGMT-U patients. In Stupp et al (2009) the Methylated patients had a
10.9-month survival advantage over the Unmethylated patients. DCVax-L increased this advantage to 14.9
months. McDonald et al showed in 2015 that Methylated tumors had 400% more somatic mutations than
Unmethylated tumors and there is strong published evidence (largely from various checkpoint inhibitor
clinical trials, described and referenced extensively in the original white paper) that suggests a 4-fold
increase in tumor mutational burden may be clinically meaningful in the context of immunotherapies that
are designed to target mutations and other tumor associated antigens. So, a good immunotherapy in GBM
might be expected to increase the mOS difference between Methylated and Unmethylated patients, as was
the case in the DCVax-L interim analysis.

4. Extensive supporting evidence from preclinical and early (Phase I and II) clinical trials using DCVax (the
direct or lysate versions) alone or in combination with other cancer immunotherapies (TLR agonists and
checkpoint inhibitors, for example) suggest NWBO’s DCVax methodology was able to generate an anti-
tumor immune response and clinical responses in patients with GBM and various other tumor types.

5. The 2018 interim analysis also demonstrated the safety and feasibility of DCVax-L for newly diagnosed
GBM. Safety, feasibility, and efficacy are key considerations for the FDA and other regulatory agencies
around the world.

New Information and Analysis

Company Updates
Recent Northwest Biotherapeutics’ press releases had two important notices:

1. NWBO announced that the company is working to submit Statistical Analysis Plans (SAPs) and moving
toward data lock and analysis needed to get to the top line data.2 In theory, each of these steps could already
be completed and presumably there will be further updates for any number of the steps required to get to,
and including, top line. Notably, NWBO is submitting SAPs to four agencies representing four different
markets, which gives them four chances of approval in at least one market. We like those odds. Perhaps we
will hear more in early June at ASCO 2019.

2. NWBO announced that they are planning Phase II trials.3 It’s not clear, yet, if one or more of these Phase II
trials will include a partnership deal. Readers are reminded about the Nektar-Bristol Myers Squibb
immunotherapy deal, which was the largest in biotech history, highly favorable to Nektar, and recently
launched 18 clinical trials. In that deal, BMY secured an exclusive on NKTRs IL2 for combination with
their Checkpoint Inhibitors. Notably, DCVax generates anti-tumor T cells and CIs unleash T cells, perhaps
the most perfect combo imaginable for the highly lucrative CI industry assets which are slated to generate
$50 billion annual revenue in near the future. Perhaps we will hear more in early June at ASCO 2019.

Dr. Liau’s Updates

Dr. Linda Liau presented important updates at the 2018 Society for NeuroOncology (SNO) meeting and in her
recent talk for the UCLA Neurosurgery Update 2019 entitled Immunotherapy and Clinical Trials for Brain

1. Dr. Liau shared a table that shows interim, blinded DCVax-L 1, 2, and 3-year survival results compare
favorably to the SOC and various other materially-related clinical trials including Optune. It’s useful to
restate the table here, because we believe it is so compelling:
Dr. Liau also noted that the patient characteristics in the DCVax-L cohort are similar to key trials and we
discussed this topic more extensively in the original white paper.

2. Dr. Liau presented updated interim, blinded survival data at the SNO meeting and at the UCLA
Neurosurgery Update 2019 showing that additional follow-up (2017 vs 2018 data sets) resulted in
improved 3-year survival for patients with MGMT-Methylated (46.4% vs 49.1%) and MGMT-
Unmethylated (11.0% vs 14.4%) tumors while the Methylated group further increased their mOS result
(34.7 to 35.1 months). Interestingly, the mOS delta between the two MGMT groups expanded from 14.9 to
15.3 months with additional follow-up as we suggested could happen with a cancer immunotherapy that
targets neoantigens. Dr. Liau’s table is restated below:

3. With additional follow-up, the top 100 survivors’ estimated mOS shifted from 40.4 to 58.4 months. This 18
month gain in estimated survival is remarkable considering the increase in follow-up was probably only
about 18 months.

4. Dr. Liau noted that the “majority” of these top 100 survivors have not progressed, which suggests that they
may contribute to impressive progression free survival results. Based on her statement and the updated
mOS of 58.4 months, a conservative estimate is that at least 51/331 (15%) of the patients in the DCVax-L
trial have survived about 5 years without progression. We expect this percentage to improve for the early-
treated patients (with a concomitant decrease for the delayed-treated and untreated) when the trial is
unblinded and the data are analyzed.

5. Dr. Liau mentioned there are “dozens” of long-term survivors in various DCVax trials like the patient that
is living 16 years past diagnosis.

6. Dr. Liau noted on March 1st 2019 at the UCLA Neurosurgery Update 2019 conference that Phase II trials of
DCVax in combination with checkpoint inhibitors will begin in about 2 months.5 Perhaps we could see the
first patient dosed on or around ASCO 2019. The presented trial design incorporates recent information that
suggests checkpoint inhibitors work better in the neoadjuvant setting for GBM where they unleash
preexisting T cells while the adjuvant checkpoint administration is intended to unleash both preexisting and
DCVax-generated anti-tumor T cells.

7. Dr. Liau also noted (from previously published studies) that patients with a mesenchymal subset diagnosis
respond particularly well to DCVax-L6 – This is important and bodes well for regulatory considerations
because it’s a major subtype of GBM and also has a relatively poor prognosis compared to the other
subtypes. It will be interesting to see if the SAPs exploit this understanding. Newly diagnosed GBM is a
severe unmet need; a mesenchymal diagnosis takes this severe need a step further.

8. Dr. Liau discussed pseudo-progression and made it very clear that the medical field is now well aware of
this previously misunderstood data point and studying it extensively. It appears academia now understands
the need for more reasonable methods of scoring progression, i.e. if the tumor goes away after swelling in
response to an immunotherapy perhaps it should not be scored as progression. This new understanding will
support the presumed primary endpoint of progression in the DCVax-L Phase III trial.

Other Progress
Early-stage trials of checkpoint inhibitor or DC vaccine strategies from other academic groups or companies in
GBM or other cancers have shown positive trends, recently:

1. Checkpoint inhibitors showed promise for GBM in an MSI positive patient7 and trials in the neoadjuvant8–
setting. A whole-cell lysate dendritic cell vaccine showed encouraging results in a Phase II study,11 and a
neoantigen vaccine was able to induce immune responses in GBM patients, particularly off steroids.12
These responses call into question the long-held dogma that GBM is impenetrably immunosuppressive and
not amenable to cancer immunotherapies.

2. A dendritic cell vaccine Phase II trial in colorectal cancer patients with liver metastasis showed promise,
although it’s a small trial and confounded by an imbalance of MSI positive patients with more in the
vaccine arm.13

3. Dendritic cell vaccines showed promise in early trials of ovarian and various other cancers.14,15

Potential Valuation and Commercial Opportunity

When thinking about the potential future valuation of NWBO, it is helpful to look at Provenge. Provenge is an FDA-
approved DC vaccine product targeting only a single antigen for use in prostate cancer which generated about $365
million in revenue in 2018. This data point provides a strong precedent for biological, technical, and commercial
success of the DC vaccine concept. NWBO’s DCVax-L may target all of the tumor-associated antigens found in an
individual’s tumor cells, providing a distinct advantage over approaches using a single antigen.

As a rough, conservative estimate of potential valuation, we use the following:

20,000 ndGBM per year in US x $100,000 per patient = $2 billion revenue x 10x multiple = $20 billion market cap

The valuation based solely on newly diagnosed GBM should be higher with the consideration of Europe and other
markets and the likelihood that the cost per patient will exceed our conservative place-holder. Furthermore, since
DCVax is a platform technology that may, in theory, be used essentially on any cancer (although, the company
seems to focus currently on solid tumors) and the likelihood of success in other indications (due to higher mutational
burden and/or less challenging immunosuppressive environments compared to GBM) the valuation may be much
higher going forward. It will be interesting to see which indications they will approach first in their Phase II combo

Genesis of Current Opportunity

We suggested that the 2015 clinical hold might be due to abundant caution around the phenomenon of pseudo-
progression, which often occurs when patients are treated with immunotherapies (as the tumor enlarges with
infiltrating lymphocytes etc.). Notably, pseudo-progression is known to correlate with improved survival outside of
the immunotherapy setting. The clinical hold was lifted, and the Phase III trial was completed. The role of pseudo-
progression and the significance of the completion of the trial appear to be lost on some biotech analysts and
reporters with outsized influence.

The clinical hold in 2015, which was later resolved, dramatically altered sentiment and was at least partly
responsible for driving the market capitalization below $100 million, setting up what we believe was an asymmetric
risk-reward profile with a potential valuation greater than $10 billion if the top line data is positive.

NWBO endured several capital raises at low valuations, but this cycle may finally break if NWBO
can imminently disclose material information regarding results or business development deals related to the Phase
III trial or Phase II combo trials.
While we are not at all focused on the naked shorting issue, many investors seem to think there is a systematic
attempt to force the Company to fund at artificially low market cap levels and suggest the Company may be
investigating the actors. If true, any ongoing investigation initiated by the Company may serve to limit naked
shorting at the more reputable financial institutions, particularly in light of the many potential upcoming catalysts
outlined in this update.

Potential Milestones and Catalysts at ASCO 2019

ASCO is a grand stage for the clinical oncology field. Updates from the company might include, without limitation,
the following potential milestones and catalysts:

1. NWBO could potentially provide greater clarity on the nature, number, and timing of the Phase II combo
trials. Are there any related emerging business deals, particularly with companies potentially vying to
combine their checkpoint inhibitor assets with a dendritic cell vaccine platform?

2. NWBO could potentially provide an update on the progress of each of the four SAPs. We presume that they
will attempt to have all four approved before locking, unblinding, and analyzing the Phase III data.

3. NWBO could potentially provide greater guidance and clarity on the timing of the top-line Phase III data.

4. NWBO could potentially update on manufacturing capacity

5. NWBO could potentially update on additional key employees

6. NWBO could potentially update on the exercise of warrants and associated capital inflows


We believe NWBO is leading the burgeoning DC vaccine race because their Phase III read-out appears imminent
and their platform is capable of addressing the vast majority of cancers, in theory. There is a growing preponderance
of evidence that suggests there is intrinsic value in the DCVax platform. A positive Phase III in newly diagnosed
GBM will open the flood gates to more favorable funding and more rapid development for other cancer indications
and immunotherapy combination trials. Accordingly, the decision by Linda Powers to allow the median follow-up
time to mature such that the results captured the “long tail” of survival may be regarded as one of the most difficult
and important decisions in biotech history. Demonstration of progress with the SAPs, Phase II combination trials,
and greater clarity on the timing of the top line results for the Phase III GBM trial will be very useful for investors.
In our next update, we intend to share two additional discussion points which we believe could impact the valuation
of NWBO after positive Phase III data in GBM.


Carlo Rago, PhD owns Northwest Biotherapeutics (NWBO) Common Stock. In addition, Dr. Rago serves as a
Consultant to Bigger Capital and is a partner in District 2 Capital. Dr. Rago’s compensation at District 2 Capital and
Bigger Capital depends on the performance of the securities in their portfolios. District 2 Capital and Bigger Capital
own both Common Stock and Warrants of NWBO. This review is based solely on publicly available information
and does not represent medical or investment advice in any way.

This white paper may contain forward-looking statements, including statements as to anticipated or expected results,
beliefs, opinions, and future financial performance. The forward-looking statements are based on current
expectations and assumptions and involve risks and uncertainties that may cause the Company's actual experience to
differ materially from that anticipated.

The views contained in this white paper represent the opinions of Dr. Rago as of the date hereof. In addition, the
efficacy and safety of DCVax-L is only one element in valuing the securities of the Company. Investors and other
interested parties of the Company are encouraged to do their own analysis of DCVax-L and the Company. Dr. Rago
reserves the right to change any of his opinions expressed herein at any time and for any reason and expressly
disclaims any obligation to correct, update or revise the information contained herein. The information contained in
the white paper may not contain all of the information required in order to evaluate the value of the Company or its
securities. Investors should seek independent scientific or financial advice regarding the efficacy and safety of
DCVax-L, the suitability of investing in any securities or of following any investment strategies; Dr. Rago is not
offering or providing such services in connection with this white paper or otherwise making a recommendation to
buy or sell any of the Company’s securities.

About the Author

Dr. Carlo Rago received his PhD in Cellular and Molecular Medicine at the Johns Hopkins School of Medicine and
trained as a post-doctoral fellow in the Ludwig Center for Cancer Genetics and Therapeutics at Johns Hopkins
where he was the first to demonstrate the dynamics of circulating tumor DNA (now called liquid biopsies)16 and
developed early genome editing techniques17 to facilitate gene function studies and drug discovery. These and other
scientific contributions have found widespread use. Carlo was also instrumental in the formation of a global
federation of disease-focused foundations, called the Duchenne Alliance, where he served as their scientific director
and initiated their venture philanthropy program. Dr. Rago’s software company, OpenOnward, was the first to offer
crowd-funding of drug development projects in a secure, online environment and the DuchenneDashboard helped
empower the community of foundations to identify and fund the most promising therapies and clinical trials for
Duchenne muscular dystrophy. Dr. Rago’s privately held biotech company, DMD Therapeutics, was named on the
list of top 20 life sciences companies to watch in 2018 for their preclinical development efforts. Carlo has a passion
and deep understanding of cancer-immunotherapy and gene therapy strategies and works with the investment
community to identify biotechnology opportunities with the most transformative potential.


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