When it comes to winning biotech stocks this year, coronavirus vaccine developers automatically come to many investors’ minds. However, one of the top-performing stocks in the sector is Northwest Biotherapeutics (OTC:NWBO), which focuses on immunotherapies that treat cancer, and has returned a staggering 408% since January.
The main reason why investors are so excited about Northwest Biotherapeutics’ prospects is that the company’s 14-year-long phase 3 clinical trial to evaluate its one and only immunotherapy candidate, DCVax-L, as a treatment for glioblastoma, has concluded. Should you consider buying the stock in anticipation of the data release? Let’s find out together.
Glioblastoma is a deadly form of brain cancer prevalent in up to 15% of people with brain tumors. Even after patients receive standard of care (SOC) treatments consisting of surgery, chemotherapy, and radiotherapy, their median survival time comes down to just 15.5 months in historical studies. DCVax-L is an experimental immunotherapy that seeks to stimulate patients’ own immune systems to fight cancer growth.
The potential biologic has been in phase 3 clinical trials since December 2006. In the study, all glioblastoma patients receive SOC treatments, while a random portion also receives DCVax-L via upper arm injections. A key trial endpoint requires at least 233 patient deaths out of a total of 331 participants enrolled to calculate a survival benefit for DCVax-L, if any. The company completed its study on July 24, and the data is currently being reviewed by statisticians. In the meantime, speculations on the results have ranged from wildly enthusiastic to pessimistic from excited investors and short-sellers.
The bullish case
The bullish case for Northwest Biotherapeutics stock is straightforward: The DCVax-L clinical trial was supposed to wrap up as early as November 2016, but had to keep going because the projected number of deaths had not occurred by then.
Around the time when the trial was enrolling, only 3% of glioblastoma patients who received SOC survived over five years. Due to extremely low survival rates for patients who receive SOC treatments, bullish investors argue that there is no other logical explanation for the clinical study going into overtime than DCVax-L keeping patients alive longer than expected.
The bearish case
The bearish case is a lot more complicated.
Clinical trials investigating experimental biologics for deadly diseases with a lack of therapeutic options usually have pre-planned interim analyses. DCVax-L’s phase 3 trial had two such analyses built into the study.
The analysis is conducted by an independent data-monitoring committee (DMC) that can recommend that the trial stop early if an experimental therapy demonstrates statistically meaningful efficacy against SOC treatments. This way, the biologic can quickly advance to the approval stage in order to save more lives.
Northwest Biotherapeutics’ DMC carried out two interim analyses on the DCVax-L study in 2017 and 2018 (more on this later). Both times, however, the company published the DMC’s findings as blinded, and the trial continued. Unfortunately, that doesn’t make any sense at all in the context of