Northwest Biotherapeutics Inc (OTCMKTS:NWBO): What The Whitebox Agreement Tells Us

Northwest Biotherapeutics, Inc (OTCMKTS:NWBO) has been a real tough stock to hold over the last couple of years. It's fallen prey to aggressive short sell type manipulation. It's had clinical halt related development setbacks for its lead asset and management has come under scrutiny for certain capital transfer actions. The company has collapsed from more than $12 a share back in July 2016 to its current price of in and around $0.34 – a loss of 97%.We've covered the stock on a number of occasions throughout this period, each time trying to serve up some clarity into an otherwise very murky information base. It's taken nearly two years, but it now looks as though the stock is back on track, and could have finally found a floor to its long term decline.Here's what we're thinking.For a bit of background, this is a development stage biotechnology company that is trying to bring various cancer therapies to market, all rooted in a proprietary technology that uses dendritic cells to create an immuno-oncology agent. The lead program, a brain cancer program investigating a version of the drug called DCVax-L, is the one mentioned briefly above, the one that was subject to a clinical hold – a hold which lifted last month.Clinical holds are not uncommon, but what was uncommon about this one was its length, its halting of new enrollment only, and – perhaps most importantly – the company's treatment of the hold from a communication perspective. Basically, management closed its lines of communication never explained why the hold was in place, what they were doing to rectify the situation, all that sort of thing. This is – for the majority – the primary driver behind the value loss seen over the last eighteen months or so.Anyway, as mentioned, the hold is now lifted, and the trial ongoing. Enrollment is complete (as per a reduced target announced alongside the hold lift) and we're basically waiting for top line. As we noted in our previous coverage, the longer this takes, the better. Why? Because top line will come after a certain amount of events have been reached in the trial. These events are deaths, and so the longer that the study patients live, the better the drug is performing.So what's changed between our last coverage and now that warrants us taking another look?Well, Northwest just announced that it has reached an agreement with group of bondholders affiliated with an entity called Whitebox Advisors. Whitebox holds convertible seniors worth around $11 million, and the agreement has seen Northwest and Whitebox negotiate a time payment approach tailored to the company's development schedule with increasing periodic payments over the course of the next 4 months.This schedule, for us, is a clue as to what we can expect over the coming months. Specifically, payments of $2 million and $2.5 million in and around the AACR Annual 2017 Meeting, and a payment of $5.5 million shortly after the ASCO Annual Meeting, suggest the company is looking to both events as value drivers. In turn, this suggests Northwest could be about to report something big at each event – with the most likely report being some degree of insight into the GBM trial. If this proves true, there's a huge potential upside on the company's current market cap of $58 million.There's still risk here, of course, and as biotechs go this is one with a large degree of uncertainty associated with it. Dilution is going to be an issue near term whatever happens with the data (although the Whitebox agreement softens this somewhat) and there are a few legal proceedings that probably won't result in anything material, but need to be taken into consideration.That said, this company has taken such a beating over the last eighteen months that if it can show that its drug works, there's only one direction it can travel, and that's up.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.