NWBO Stock Tanks on Top-Line Data Results, What to Know
After releasing top-line results from an over 15-year study, NWBO stock fell 50% on Tuesday. Investors had high hopes for the study, and the presentation did not deliver.
Northwest Biotherapeutics (Nasdaq: NWBO) is a biotech company focusing on developing personalized immune therapy options for cancer. In particular, Northwest’s lead product, DCVAX-L, is currently targeting one of the most aggressive forms of brain cancer in Glioblastoma (GBM).
The anticipation fueled a rally in NWBO stock, hitting close to a 52-week high of over $2 per share. But, with the report failing to live up to the hype, investors dumped their shares of NWBO stock.
At the same time, there are a few key takeaways they may be overlooking. With Northwest Biotherapeutics stock sitting below $1 again, is it time to consider buying as the company takes its next steps. Keep reading to learn why NWBO stock is tanking and what you can expect next.
Why is NWBO Stock Selling Off?
The main reason NWBO stock price is down is due to the disappointing top-line results. After running 150% in the month leading up to the results, share prices sold off almost instantly.
For example, the presentation became available at 11:10 am. NWBO shares started rapidly selling off on heavy volume around 11:15 am. With this in mind, it didn’t take long for investors to diagnose the study results.
For one thing, the data shows the therapy does not affect Progression Free Survival (PFS). In fact, it showed the exact opposite. Placebo patients had better results.
- DCVAX-L = 6.2 months PFS.
- Placebo = 7.6 months PFS.
Looking at the data shown suggests the therapy is less effective. For an over 15-year study, the results are less than ideal.
However, the firm notes that vaccine-induced Pseudo-progression (PsPD) may skew the results. PsPD is when a tumor initially grows and then becomes smaller after time. Although this is the ideal outcome, it can be a false sign of recovery during trials.
Keep reading for more on NWBO stock.
Why Are the Results Important?
GBM is a particularly aggressive brain cancer, accounting for almost half of brain tumor diagnoses. Furthermore, the disease is one of the most deadly, hard to treat forms of cancer, making it especially hard to beat.
In fact, President Biden’s son, Beau Biden, passed away from GBM in 2015.
Patients have a nearly 100% recurrence rate, and the survival rate is extremely low. In short, the five-year survival rate is 6.8%, while the average length of survival is about a year.
Currently, there are no practical options on the market. Even though the FDA has approved four drugs, none expand patients’ lives past a few months. Yet since then, over 400 clinical trials have been held with almost 32,000 patients and little success.
Moreover, GBM is one of the costliest cancers to treat with few options. Not only do current treatments leave harsh side effects, but they can be expensive, leaving families with little choice. Although the results are not ideal, they offer a few positive takeaways.
Positive Takeaways from Northwest Phase 3 Trial
In phase 3 clinical trials, the main goal is to study the effectiveness and safety of the treatment compared to current options. For one thing, DCVAX-L seems to be well-tolerated, with close to 2,200 doses and no autoimmune reactions.
Furthermore, when taking all data from the 15-yearlong study, the overall results show the therapy met its objectives.
- Newly-diagnosed GBM: survival at 5 years 13% vs 5.7%.
- Recurrent GBM: 13.2 months of survival (mOS) vs 7.8 mOS.
In fact, NWBO stock’s phase 3 trial is the first to improve mOS since Temodar, a harsh chemo option. Most important, the treatment can be helpful when combined with several other therapies, opening up bigger market potential.
For example, here are a few possible combination therapies:
- Chemotherapy
- Radiotherapy
- Checkpoint Inhibitors
- Adaptive T Cell Transfer
And this is just the start. NWBO stock has the chance to use its therapy in combination with a wide variety of treatments.
NWBO Stock Analysis
The market is punishing higher-risk assets right now like growth stocks. Investors are fleeing the markets between inflation climbing and the Federal Reserve raising interest rates to combat it.
On top of this, Biotech stocks have been one of the weakest industries this past year. The iShares Biotechnology ETF (Nasdaq: IBB) is down 26% this past year compared to the S&P 500 (SPX) down 4%.
Stocks have accelerated their decline in the past week, with all major indexes losing ground. Even though the results were not aligned with investor expectations, the selloff can be partially to blame. With this in mind, NWBO stock is small-cap, higher risk, and penny stock, meaning it can trade much more violently.
Meanwhile, after the results were released, NWBO stock saw heavy volume of around 77 million compared to its average of 3.5 million. So, there’s no denying the selling pressure.
On the positive side, after reaching a 52-week low of $0.38, investors seemingly scooped up shares as NWBO shares bounced. Northwest Biotherapeutics stock is around $0.80, up over 100% from its lows.
NWBO Stock Forecast: What to Expect Next
Although the selloff looks violent, the entire market is essentially selling off this month. NWBO stock is down 63% from its 52-week high of $2.15 per share.
With the phase 3 results out in the open, Northwest can now focus on advancing the therapy. For one thing, DCVAX-L has potential in other combination therapies. So no, the party is not over yet for the biotech firm.
After 15 years of progressing on a study, investors had hoped for more. Then again, the company is targeting the most aggressive treatment resistance form of brain cancer. Not to mention cancer therapies alone.
At the same time, the therapy has potential. For example, Brad Silver was diagnosed with GMB in 2003 with a golf ball size tumor in his brain.
After being told his cancer was too far, Brad tried a new immunotherapy at the time, DCVAX-L. As part of the clinical trial, Brad had his tumor removed and is still living cancer-free today.
If the company sees more success stories like Brad’s, NWBO stock will look relatively cheap at these levels. But Northwest will need to prove the therapy to be more consistent or can work in combination to enhance results.