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Northwest Biotherapeutics, Inc (NASDAQ:NWBO) Hits The OTC, What's Next?

Northwest Biotherapeutics, Inc (NASDAQ:NWBO) Hits The OTC, What's Next?
Written by
Chris Sandburg
Published on
December 9, 2016
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Northwest Biotherapeutics, Inc (NASDAQ:NWBO) just announced that it is voluntarily delisting its stock from NASDAQ in favor of an over the counter listing, and markets have responded positively to the news. The general view of a delisting is a negative one, as it implies a company isn’t strong enough to meet the stringent requirements of a top tier exchange list. In this instance, however, and in a few other instances that have hit press this year so far, it can be a beneficial move. Not just from a cost perspective (it's expensive to maintain a listing on a major) but from a capital structure perspective. Shareholders don't like reverse splits, yet we see them undertaken so often at this end of the market for the sole purpose of raising PPS above minimum bid.Northwest has been a controversial stock for the past twelve months. The company has a couple of promising programs underway, but for a variety of reasons, has fallen out of favor with shareholders. These reasons are primarily rooted in a lack of communication regarding a temporary halt in enrollment for the company's brain cancer trial, which – for reasons as yet unknown – hasn’t progressed since late 2015. We speculated as to why the company may be being quiet on the issue in this piece, so for those new to Northwest, it's worth taking a look there for a bit of a recap.So, what's now?Well, we got an update in November concerning the company's phase II in colorectal cancer, and near term, this is probably the trial that's going to serve up any catalysts. With that said, and dosing length aside, we don't know much as to the time frames of the investigation. It's a six-month initial dosing with long term follow up (which in colorectal cancer generally equates to a twelve month extension) and its being conducted in Germany, investigating a version of Northwest's DCVax vaccine, called DCVax-L, in combination with Merck & Co., Inc. (NYSE:MRK)'s blockbuster Keytruda. Again, we broke this one down previously, so by way of a catch up, take a look at this piece.We'd like to see enrollment kick off during the first quarter as a way of getting the stock kick started into 2017. There's a caveat, however. It needs funding to do so, and that's going to be dilutive. Couple this with a host of other capital issues (there's around $11 million in convertibles that are now subject to fundamental change rules, or at least will be once the delisting happens, and will need addressing in twenty days' post action) and there's enough dilution waiting in the wings to make this a tough one to hold.That said, Northwest holders are very familiar with what it feels like to hold a tough stock, and with the reverse split now off the table, there's some level of reprieve on the dilution.Looking outside of the company itself, NWBO has been taking a bit of a hit from The Street's Feuerstein of late. He's put out a couple of Tweets highlighting the delisting, and painting it as the NASDAQ kicking the company off the exchange (which it's not), but he also noted a fund holding that may inadvertently boost the stock – something that we're pretty certain isn’t his intention given the nature of his social posts. Specifically, he notes that renowned British biotech investor has a large position in NWBO. This isn’t fresh news, of course. Woodford is a long time holder having taken a position by way of a $40 million financing back in April 2015.The bottom line here is that Northwest remains in a very similar position as it was a few weeks ago, but the release from the pressure of a reverse split has lifted sentiment a little. There are still some capital risks, and the implications of the delisting for the convertibles are uncertain, but the move at least shows some degree of respect for shareholders, which is something that has been sorely lacking from NWBO management this year. What do shareholders want now? For the company to return to a trial focused news stream, and to put this year behind them.We will be updating our subscribers as soon as we know more. For the latest updates on NWBO, sign up below!Disclosure: We have no position in NWBO and have not been compensated for this article.

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