NWBO 10-Q
Northwest Biotherapeutics Inc (NWBO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______to _______
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(
(Registrant’s telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
| ☐ | Accelerated filer |
| ☐ |
| ☒ | Smaller reporting company |
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| Emerging growth company |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Title of each class | Trading Symbol | Name of each exchange on which registered |
As of May 12, 2025, the total number of shares of common stock, par value $0.001 per share, outstanding was
NORTHWEST BIOTHERAPEUTICS, INC.
FORM 10-Q
TABLE OF CONTENTS
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Item 1. | Condensed Consolidated Interim Financial Statements (Unaudited) | |
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Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 | 3 | |
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Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024 | 6 | |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24 | |
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2
PART I - FINANCIAL INFORMATION
NORTHWEST BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
| March 31, |
| December 31, | |||
2025 | 2024 | |||||
(Unaudited) | ||||||
ASSETS |
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Current assets: |
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Cash and cash equivalents | $ | | $ | | ||
Prepaid expenses and other current assets |
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Total current assets |
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Non-current assets: |
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Property, plant and equipment, net |
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Right-of-use asset, net | | | ||||
Indefinite-lived intangible asset | | | ||||
Goodwill | | | ||||
Other assets |
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Total non-current assets |
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TOTAL ASSETS | $ | | $ | | ||
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LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: |
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Accounts payable and accrued expenses | $ | | $ | | ||
Accounts payable and accrued expenses to related parties and affiliates |
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Convertible notes, net |
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Convertible notes at fair value | | | ||||
Notes payable, net |
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Contingent payable derivative liability | | | ||||
Warrant liability |
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Investor advances | | | ||||
Share payable | | | ||||
Lease liabilities | | | ||||
Total current liabilities |
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Non-current liabilities: |
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Convertible notes at fair value, net of current portion | | | ||||
Notes payable, net of current portion, net |
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Lease liabilities, net of current portion | | | ||||
Contingent payment obligation | | | ||||
Total non-current liabilities |
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Total liabilities |
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COMMITMENTS AND CONTINGENCIES (Note 12) |
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Mezzanine equity: |
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Series C Convertible Preferred Stock, | | |||||
Stockholders’ deficit: |
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Preferred stock ($ | ||||||
Common stock ($ |
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Additional paid-in capital |
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Stock subscription receivable |
| ( |
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Accumulated deficit |
| ( |
| ( | ||
Accumulated other comprehensive income |
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Total stockholders’ deficit |
| ( |
| ( | ||
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT | $ | | $ | | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
NORTHWEST BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except per share amounts)
(Unaudited)
For the three months ended | ||||||
March 31, | ||||||
|
| 2025 |
| 2024 | ||
Revenues: | ||||||
$ | | $ | | |||
Total revenues | | | ||||
Operating costs and expenses: | ||||||
Research and development | | | ||||
General and administrative | | | ||||
Total operating costs and expenses | | | ||||
Loss from operations | ( | ( | ||||
Other income (expense): | ||||||
Change in fair value of derivative liabilities | | | ||||
Change in fair value of share payable | ( | ( | ||||
Change in fair value of convertible notes | | | ||||
Loss from extinguishment of debt | ( | ( | ||||
Loss from warrant modification | — | — | ||||
Interest expense | ( | ( | ||||
Foreign currency transaction gain (loss) | | ( | ||||
Total other expense | ( | ( | ||||
Net loss | ( | ( | ||||
Deemed dividend related to warrant modifications | ( | ( | ||||
Net loss attributable to common stockholders | $ | ( | $ | ( | ||
Other comprehensive income (loss) | ||||||
Foreign currency translation adjustment | ( | | ||||
Total comprehensive loss | $ | ( | $ | ( | ||
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Net loss per share applicable to common stockholders |
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Basic and diluted | $ | ( | $ | ( | ||
Weighted average shares used in computing basic and diluted loss per share | | | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
NORTHWEST BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(in thousands)
(Unaudited)
| For the Three Months Ended March 31, 2025 | |||||||||||||||||||||||||
Mezzanine equity | Accumulated | |||||||||||||||||||||||||
Series C Convertible | Additional | Other | Total | |||||||||||||||||||||||
Preferred Stock | Common Stock | Paid-in | Subscription | Accumulated | Comprehensive | Stockholders’ | ||||||||||||||||||||
| Shares |
| Amount |
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| Shares |
| Par value |
| Capital |
| Receivable |
| Deficit |
| Income (Loss) |
| Deficit | ||||||||
Balances at January 1, 2025 |
| |
| $ | |
| | $ | | $ | | $ | ( | $ | ( | $ | | $ | ( | |||||||
Series C convertible preferred stock conversion |
| ( |
| ( |
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| — |
| — |
| — |
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Issuance of common stock for cash, net |
| — |
| — |
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| — |
| — |
| — |
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Warrants exercised for cash |
| — |
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Issuance of common stock for conversion of debt and accrued interest |
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Stock-based compensation |
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| — |
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Net loss |
| — |
| — |
| — |
| — |
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| — |
| ( |
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| ( | ||||||||
Warrant modifications |
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Deemed dividend related to warrant modifications |
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| ( |
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| ( | ||||||||
Cumulative translation adjustment |
| — |
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| — |
| — |
| — |
| — |
| — |
| ( |
| ( | ||||||||
Balances at March 31, 2025 |
| | $ | |
| | $ | | $ | | $ | ( | $ | ( | $ | | $ | ( | ||||||||
For the Three Months Ended March 31, 2024 | ||||||||||||||||||||||||||
Mezzanine equity | Accumulated | |||||||||||||||||||||||||
Series C Convertible | Additional | Other | Total | |||||||||||||||||||||||
Preferred Stock | Common Stock | Paid-in | Subscription | Accumulated | Comprehensive | Stockholders’ | ||||||||||||||||||||
| Shares |
| Amount |
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| Shares |
| Par value |
| Capital |
| Receivable |
| Deficit |
| Income |
| Deficit | ||||||||
Balances at January 1, 2024 | |
| $ | | | $ | | $ | | $ | ( | $ | ( | $ | | $ | ( | |||||||||
Issuance of Series C convertible preferred stock for cash | |
| | — |
| — |
| — | — |
| — |
| — |
| — | |||||||||||
Series C convertible preferred stock conversion | ( |
| ( | |
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| | — | — | — | | ||||||||||||||
Warrants exercised for cash | — |
| — | |
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| | — |
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Cashless warrants and stock options exercise | — |
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| ( | — |
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Issuance of common stock for conversion of debt and accrued interest | — | — | | | | — | — | — | | |||||||||||||||||
Stock-based compensation | — |
| — | — |
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| | — |
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| — |
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Net loss | — |
| — | — |
| — |
| — | — |
| ( |
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| ( | |||||||||||
Warrants modfication | — |
| — | — |
| — |
| | — |
| — |
| — |
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Deemed dividend related to warrants modification | — |
| — | — |
| — |
| ( | — |
| — |
| — |
| ( | |||||||||||
Cumulative translation adjustment | — | — | — | — | — | — |
| — |
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Balances at March 31, 2024 | | $ | | | $ | | $ | | $ | ( | $ | ( | $ | | $ | ( | ||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
NORTHWEST BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
For the three months ended | ||||||
March 31, | ||||||
| 2025 |
| 2024 | |||
Cash Flows from Operating Activities: |
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Net loss | $ | ( | $ | ( | ||
Reconciliation of net loss to net cash used in operating activities: | ||||||
Depreciation and amortization | | | ||||
Amortization of debt discount | | | ||||
Change in fair value of derivatives | ( | ( | ||||
Change in fair value of share payable | | | ||||
Change in fair value of convertible notes | ( | ( | ||||
Loss from extinguishment of debt | | | ||||
Amortization of operating lease right-of-use asset | | | ||||
Stock-based compensation for services | | | ||||
Subtotal of non-cash charges | | | ||||
Changes in operating assets and liabilities: | ||||||
Prepaid expenses and other current assets | | ( | ||||
Other non-current assets | | ( | ||||
Accounts payable and accrued expenses | | | ||||
Related party accounts payable and accrued expenses | | ( | ||||
Lease liabilities | ( | | ||||
Net cash used in operating activities | ( | ( | ||||
Cash Flows from Investing Activities: | ||||||
Purchase of equipment and construction in progress | ( | ( | ||||
Net cash used in investing activities | ( | ( | ||||
Cash Flows from Financing Activities: | ||||||
Proceeds from issuance of Series C convertible preferred stock | — | | ||||
Proceeds from issuance of common shares | | — | ||||
Proceeds from exercise of warrants | | | ||||
Proceeds from issuance of notes payable, net | | — | ||||
Proceeds from issuance of convertible notes payable, net | | | ||||
Proceeds from contingent payment obligation | — | | ||||
Repayment of notes payable | ( | — | ||||
Repayment of convertible notes payable | ( | — | ||||
Net cash provided by financing activities | | | ||||
Effect of exchange rate changes on cash and cash equivalents | ( | | ||||
Net increase in cash and cash equivalents | | | ||||
Cash and cash equivalents, beginning of the period | | | ||||
Cash and cash equivalents, end of the period | $ | | $ | | ||
Supplemental disclosure of cash flow information | ||||||
Interest payments on notes payable | $ | ( | $ | — | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
6
NORTHWEST BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
For the three months ended | ||||||
March 31, | ||||||
| 2025 |
| 2024 | |||
Supplemental schedule of non-cash activities: |
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Cashless warrants and stock options exercise | $ | — | $ | | ||
Issuance of common stock for conversion of debt and accrued interest | $ | | $ | | ||
Series C convertible preferred stock conversion | $ | | $ | | ||
Capital expenditures included in accounts payable | $ | | $ | | ||
Deemed dividend related to warrant modifications | $ | | $ | | ||
Debt discount related to warrant modifications | $ | — | $ | | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
1. Organization and Description of Business
Northwest Biotherapeutics, Inc. and its wholly owned subsidiaries Flaskworks, Northwest Biotherapeutics Limited, Northwest Biotherapeutics Capital Limited, Northwest Biotherapeutics B.V., and NW Bio GmbH (collectively, the “Company”, “we”, “us” and “our”) were organized to discover and develop innovative immunotherapies for cancer. The Company has developed DCVax® platform technologies for both operable and inoperable solid tumor cancers. The Company has wholly owned subsidiaries in Boston, the U.K., the Netherlands and Germany. On August 28, 2020, the Company acquired Flaskworks, LLC (“Flaskworks”), a company that has developed a system designed to close and automate the manufacturing of cell therapy products such as DCVax®.
The Company relies upon contract manufacturers for production of its DCVax products, research and development services, distribution and logistics, and related services, in compliance with the Company’s specifications and the applicable regulatory requirements.
The Company has completed a Phase 3 clinical trial of its DCVax®-L product for glioblastoma brain cancer, has publicly reported the results in a peer reviewed publication in a medical journal as well as at a medical conference, and submitted a Marketing Authorization Application (MAA) for regulatory approval in the U.K. in December 2023. The MAA is in process of their review. The Company is also in the process of restarting its DCVax®-Direct program for inoperable tumors.
2. Financial Condition, Going Concern and Management Plans
The Company has incurred annual net operating losses since its inception. The Company had a net loss of $
The Company does not expect to generate material revenue in the near future from the sale of products and is subject to all of the risks and uncertainties that are typically faced by biotechnology companies that devote substantially all of their efforts to research and development (“R&D”) and clinical trials and do not yet have commercial products. The Company expects to continue incurring annual losses for the foreseeable future. The Company’s existing liquidity is not sufficient to fund its operations, anticipated capital expenditures, working capital and other financing requirements until the Company reaches significant revenues. Until that time, the Company will need to obtain additional equity and/or debt financing, especially if the Company experiences downturns in its business that are more severe or longer than anticipated, or if the Company experiences significant increases in expense levels resulting from being a publicly-traded company or from expansion of operations. If the Company attempts to obtain additional equity or debt financing, the Company cannot assume that such financing will be available to the Company on favorable terms, or at all.
Because of recurring operating losses and operating cash flow deficits, there is substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of this filing. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern, however, they do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result from the outcome of this uncertainty.
3. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated. Certain immaterial reclassifications have been made to prior period amounts to conform to the current period presentation.
8
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company uses to prepare its annual audited consolidated financial statements. The condensed consolidated balance sheet as of March 31, 2025, condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025 and 2024, condensed consolidated statement of stockholders’ deficit for the three months ended March 31, 2025 and 2024, and the condensed consolidated statements of cash flows for the three months ended March 31, 2025 and 2024 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for the three months ended March 31, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025 or for any future interim period. The condensed consolidated balance sheet at December 31, 2024 has been derived from audited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2024 and notes thereto included in the Company’s annual report on Form 10-K (the “2024 Annual Report”), which was filed with the SEC on March 31, 2025.
Use of Estimates
In preparing condensed consolidated financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates.
On an ongoing basis, the Company evaluates its estimates and judgments, including valuing equity securities in share-based payment arrangements, estimating the fair value of financial instruments recorded as derivative liabilities, useful lives of depreciable assets, and whether impairment charges may apply. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates.
Segment Information
The Company operates in
Significant Accounting Policies
There have been no material changes in the Company’s significant accounting policies from those previously disclosed in the 2024 Annual Report.
9
Recently Adopted Accounting Standards
Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for the annual periods beginning the year ended December 31, 2025. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company adopted this standard as of January 1, 2025. The adoption of this ASU did not have any material impact on the Company’s quarterly condensed consolidated financial statements.
Recently Issued Accounting Standards Not Yet Adopted
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses (DISE) which requires disaggregated disclosure of income statement expenses for public business entities. The standard requires public business entities to disclose disaggregated information about specific natural expense categories underlying certain income statement expense line items that are considered relevant. The FASB also issued ASU No. 2025-01 (“ASU 2025-01”), Clarifying the Effective Date, which clarifies the adoption date of ASU 2024-03 as annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the potential effect of this accounting standard update on its consolidated financial statements and related disclosures.
4. Fair Value Measurements
In accordance with ASC 820 (Fair Value Measurements and Disclosures), the Company uses various inputs to measure the fair value of liabilities related to certain embedded conversion features associated with convertible debt, share liability (receivable), and the contingent payable to Cognate BioServices on a recurring basis to determine the fair value of these liabilities. The Company also elects the fair value option (“FVO”) for certain eligible financial instruments, such as convertible notes, in order to simplify the accounting treatment.
ASC 820 establishes a hierarchy categorizing inputs into three levels used to measure and disclose fair value. The hierarchy gives the highest priority to quoted prices available in active markets and the lowest priority to unobservable inputs. An explanation of each level in the hierarchy is described below:
Level 1 - Unadjusted quoted prices in active markets for identical instruments that are accessible by the Company on the measurement date.
Level 2 - Quoted prices in markets that are not active or inputs which are either directly or indirectly observable.
Level 3 - Unobservable inputs for the instrument requiring the development of assumptions by the Company.
10
The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of March 31, 2025 and December 31, 2024 (in thousands):
Fair value measured at March 31, 2025 | ||||||||||||
|
| Quoted prices in active |
| Significant other |
| Significant | ||||||
| Fair value at | markets | observable inputs | unobservable inputs | ||||||||
March 31, 2025 |
| (Level 1) |
| (Level 2) |
| (Level 3) | ||||||
Warrant liability | $ | | $ | — | $ | — | $ | | ||||
Contingent payable derivative liability | | — | — | | ||||||||
Convertible notes at fair value |
| |
| — |
| — |
| | ||||
Share payable | | — | — | | ||||||||
Total fair value | $ | | $ | — | $ | — | $ | | ||||
Fair value measured at December 31, 2024 | ||||||||||||
|
| Quoted prices in active |
| Significant other |
| Significant | ||||||
Fair value at | markets | observable inputs | unobservable inputs | |||||||||
| December 31, 2024 |
| (Level 1) |
| (Level 2) |
| (Level 3) | |||||
Warrant liability | $ | | $ | — | $ | — | $ | | ||||
Contingent payable derivative liability | | — | — | | ||||||||
Convertible notes at fair value | | — | — | | ||||||||
Share payable |
| |
| — |
| — |
| | ||||
Total fair value | $ | | $ | — | $ | — | $ | | ||||
There were
The following table presents changes in Level 3 liabilities measured at fair value for the three-month period ended March 31, 2025. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs (in thousands).
Convertible | |||||||||||||||
Warrant | Contingent Payable | Share | Notes | ||||||||||||
| Liability |
| Derivative Liability |
| Payable |
| At Fair Value |
| Total | ||||||
Balance - January 1, 2025 | $ | | $ | | $ | | $ | | $ | | |||||
Additional share payable | — | — | | — | | ||||||||||
Issuance of convertible notes at fair value | — | — | — | | | ||||||||||
Redemption of share payable | — | — | ( | — | ( | ||||||||||
Additions from debt extinguishment | — | — | — | | | ||||||||||
Debt repayment | — | — | — | ( | ( | ||||||||||
Debt conversion | — | — | — | ( | ( | ||||||||||
( | ( | | ( | ( | |||||||||||
Balance - March 31, 2025 | $ | | $ | | $ | | $ | | $ | | |||||
A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities, share payable, and contingent conversion feature (excluding the piggy-back right, which was based on key milestone estimates, see Note 7 for piggy-back rights) that are categorized within Level 3 of the fair value hierarchy as of March 31, 2025 and
11
December 31, 2024 is as follows. The liability relates to the remaining redemption feature which, like the convertible notes at fair value, includes discount factors that are unobservable inputs and proprietary in nature.
| As of March 31, 2025 |
| |||||
| Share Payable |
| Warrant Liability | ||||
Strike price | $ | | $ | | |||
Contractual term (years) |
| | | ||||
Volatility (annual) |
| | % | | % | ||
Risk-free rate |
| | % | | % | ||
Dividend yield (per share) |
| | % | | % | ||
As of December 31, 2024 | |||||||
| Share Payable |
| Warrant Liability |
| |||
Strike price | $ | | $ | | |||
Contractual term (years) | |
| | ||||
Volatility (annual) | | % |
| | % | ||
Risk-free rate | | % |
| | % | ||
Dividend yield (per share) | | % |
| | % | ||
5. Stock-based Compensation
The following table summarizes total stock-based compensation expense for the three months ended March 31, 2025 and 2024 (in thousands).
For the three months ended | ||||||
March 31, | ||||||
| 2025 |
| 2024 | |||
Research and development | $ | | $ | | ||
General and administrative |
| | | |||
Total stock-based compensation expense | $ | | $ | | ||
The total unrecognized stock compensation (primarily for consultants) cost was approximately $
12
Stock Options
The following table summarizes stock option activity for options during the three months ended March 31, 2025 (amount in thousands, except per share number):
Weighted Average | ||||||||||
Weighted | Remaining | |||||||||
Number of | Average | Contractual Life | Total Intrinsic | |||||||
| Shares |
| Exercise Price |
| (in years) |
| Value | |||
Outstanding as of January 1, 2025 |
| | $ | | $ | | ||||
Granted | | | — | |||||||
Outstanding as of March 31, 2025 |
| | $ | | $ | | ||||
Options vested (1) |
| | $ | | $ | | ||||
(1) |
Restricted Stock Awards
Advent SOW 6
There was
As of March 31, 2025,
6. Property, Plant and Equipment
Property, plant and equipment consist of the following at March 31, 2025 and December 31, 2024 (in thousands):
| March 31, |
| December 31, |
| Estimated | |||
2025 | 2024 | Useful Life | ||||||
Leasehold improvements | $ | | $ | |
| |||
Office furniture and equipment |
| |
| |
| |||
Computer and manufacturing equipment and software |
| |
| |
| |||
Land in the United Kingdom |
| |
| |
| NA | ||
| |
| |
| NA | |||
Less: accumulated depreciation |
| ( |
| ( |
|
| ||
Total property, plant and equipment, net | $ | | $ | |
|
| ||
Depreciation and amortization expense was approximately $
13
7. Outstanding Debt
The following two tables summarize outstanding debt as of March 31, 2025 and December 31, 2024, respectively (amount in thousands, except per share amounts):
|
| Stated |
|
|
|
| Fair |
| ||||||||||||
Interest | Conversion | Remaining | Value | Carrying | ||||||||||||||||
Maturity Date | Rate | Price | Face Value | Debt Discount | Adjustment | Value | ||||||||||||||
Short term convertible notes payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
6% unsecured |
|
| % | $ | $ | | $ | — | $ | — | $ | | ||||||||
8% unsecured |
| % | $ | | ( |
| — |
| | |||||||||||
| ( | — | | |||||||||||||||||
Short term convertible notes at fair value | ||||||||||||||||||||
0% unsecured | % | Variable | | — | | |||||||||||||||
8% unsecured | % | $ | | — | | |||||||||||||||
11% unsecured | % | $ | | — | | | ||||||||||||||
| — | | | |||||||||||||||||
Short term notes payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
0% unsecured | % | N/A | | — | — | | ||||||||||||||
6% secured |
|
| % |
| N/A |
| |
| — |
| — |
| | |||||||
8% unsecured |
|
| % |
| N/A |
| |
| ( |
| — |
| | |||||||
12% unsecured |
|
| % |
| N/A |
| |
| — |
| — |
| | |||||||
| |
| ( |
|
| — |
| | ||||||||||||
Long term convertible notes at fair value | ||||||||||||||||||||
11% unsecured | % | $ | | — | | | ||||||||||||||
| — | | | |||||||||||||||||
Long term notes payable |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
8% unsecured |
|
| % |
| N/A |
| |
| ( |
| — |
| | |||||||
| ||||||||||||||||||||
Ending balance as of March 31, 2025 | $ | | $ | ( | $ | | $ | | ||||||||||||
| (1) | This note was paid in full on April 25, 2025. |
14
|
| Stated |
|
|
|
|
| |||||||||||||
Interest | Conversion | Remaining | Fair Value | Carrying | ||||||||||||||||
Maturity Date | Rate | Price | Face Value | Debt Discount | Adjustment | Value | ||||||||||||||
Short term convertible notes payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
6% unsecured |
|
| % | $ | $ | | $ | — | $ | — | $ | | ||||||||
8% unsecured | % | $ | * | | ( | — | | |||||||||||||
| ( | — | | |||||||||||||||||
Short term convertible notes at fair value | ||||||||||||||||||||
8% unsecured | % | $ | | — | | | ||||||||||||||
10% unsecured | % | $ | | — | | | ||||||||||||||
11% unsecured | % | $ | | — | | | ||||||||||||||
| — | | | |||||||||||||||||
Short term notes payable |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
0% unsecured | % | N/A | | — | — | | ||||||||||||||
6% secured | % | N/A | | — | — | | ||||||||||||||
8% unsecured |
|
| % |
| N/A |
| |
| ( |
| — |
| | |||||||
12% unsecured |
|
| % |
| N/A |
| |
| — |
| — |
| | |||||||
| |
| ( |
|
| — | | |||||||||||||
Long term convertible notes at fair value | ||||||||||||||||||||
0% unsecured | % | Variable | | — | | | ||||||||||||||
11% unsecured | % | $ | | — | | | ||||||||||||||
| — | | | |||||||||||||||||
Long term notes payable | ||||||||||||||||||||
8% unsecured |
|
| % |
| N/A |
| |
| ( |
| — |
| | |||||||
Ending balance as of December 31, 2024 | $ | | $ | ( | $ | | $ | | ||||||||||||
* These convertible notes are convertible into Series C preferred shares at $
Notes Payable
On March 7, 2025, the Company entered into a Commercial Loan Agreement (the “March Commercial Loan”) with a commercial lender for an aggregate principal amount of $
During the three months ended March 31, 2025, the Company issued approximately
Convertible Notes
During the three months ended March 31, 2025, the Company modified an existing $
In addition, the Company converted $
15
Convertible Notes at Fair Value
During the three months ended March 31, 2025, the Company entered into several convertible notes (the “Long-term Convertible Notes”) with multiple individual investors (the “Holders”) with an aggregate principal amount of $
The Company elected the FVO to fair value the convertible notes described above under the guidance in ASC 825. The convertible notes at fair value are required to be remeasured using level 3 fair value measurements (see Note 4).
During the three months ended March 31, 2025, the Company modified certain existing convertible notes by (i) extending the maturity dates; (ii) reducing the conversion price, and (iii) granting the notes holders the right to further extend the maturity date of the notes from a period of time not to exceed
During the three months ended March 31, 2025, the Company converted $
For the three months ended March 31, 2025 and 2024, interest expense related to outstanding debt totaled approximately $
8. Net Loss per Share Applicable to Common Stockholders
Basic loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the reporting period. Diluted loss per common share would be computed similar to basic loss per common share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock. Because of the net loss from operations for each period, inclusion of such securities in the computation of loss per share would be anti-dilutive and thus they are excluded. Potentially dilutive weighted average common shares include common stock potentially issuable under the Company’s convertible notes and preferred stock, warrants and vested and unvested stock options.
The following securities were not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented (in thousands):
For the three months ended | ||||
March 31, | ||||
| 2025 |
| 2024 | |
Series C convertible preferred stock | | | ||
Common stock options | | | ||
Common stock warrants - equity classified | | | ||
Common stock warrants - liability classified | | — | ||
Convertible notes and accrued interest | |
| | |
Potentially dilutive securities | | | ||
9. Related Party Transactions
The Company has
16
Each of the operational programs is covered by a separate contract. The ongoing manufacturing in the London facility is covered by a Manufacturing Services Agreement (“MSA”) entered into on May 14, 2018. The development and manufacturing program at the Sawston facility is covered by an Ancillary Services Agreement entered into on November 18, 2019. Each periodic specialized program is covered by an SOW that sets forth the role and activities to be undertaken by Advent for that program, and provides for milestone payments upon completion of key elements of the program.
The Ancillary Services Agreement establishes a structure under which the Company and Advent negotiate and agree upon the scope and terms for Statements of Work (“SOWs”) for facility development activities and compassionate use program activities, as well as for the periodic specialized programs. After an SOW is agreed and approved by the Company, Advent will proceed with, or continue, the applicable services and will invoice the Company pursuant to the SOW. Since both the facility development and the compassionate use program involve pioneering and uncertainties in most aspects, the invoicing under the Ancillary Services Agreement is on the basis of costs incurred plus
SOW 8
On November 8, 2024, the Company entered into a Statement of Work #8 (“SOW 8”) with Advent that is incorporated into the Ancillary Services Agreement that was originally entered into dated November 8, 2019 and was extended on July 8, 2024. SOW 8 covers the work required to establish the DCVax-Direct program in the U.K and manufacture DCVax-Direct products for global use. Under SOW 8, the compensation consists solely of one-time cash milestone payments for each stage of the work and Advent will only receive the compensation when the applicable work is successfully completed. (When the Company previously contracted with a different company for restart of DCVax-Direct manufacturing, the contract required payment as work was performed, regardless of whether the work was successful or not, as is typical for such contract services. The other company did not succeed in producing any DCVax-Direct products meeting the specifications.)
SOW 8 includes the following 5 one-time milestones with corresponding milestone payments (which are only payable after the milestone has been achieved):
(a) Basic Technology Transfer, New SOPs & Regulatory Documents.
Review of documents, specifications and data from prior DCVax-Direct program conducted by Cognate BioServices. Development of a new set of SOPs for DCVax-Direct production in Sawston and new regulatory documents for the UK. Initial implementation in Sawston; many engineering runs. Data generation for comparability analyses of both the process and the product. Milestone payment of £
As of March 31, 2025, this milestone had been completed and paid.
(b) Process Development: TFF System vs. Other Systems.
Evaluation of the TFF system used in the prior DCVax-Direct manufacturing. Evaluation of the remaining TFF equipment from the prior program, parts needed to re-establish functional TFF systems, potential sourcing and timelines. Evaluation of remaining disposables from the prior program, requirements for new molds to enable new production of disposables (which are used for each manufacturing run with the TFF system), production arrangements for new disposables, development of new sealing method for disposables, potential sourcing and timelines for disposables. Identification and evaluation of commercially available systems to potentially substitute for TFF system. Engineering runs. Data generation for comparability analyses of TFF system vs. others. Milestone payment of £
As of March 31, 2025, this milestone had been completed but had not yet been paid. The Company had an accrued liability of $
17
(c) Process Development: Existing and New Product Composition.
Worldwide search for sourcing of BCG (1 of 2 essential reagents/ingredients required for DCVax-Direct besides the DCs), due to a severe worldwide shortage. Evaluation of the BCG mechanism of action (MoA) in DCVax-Direct, search for other agents that could have similar MoA or effects, with similar safety profile too. Sourcing of other agents, testing and selection of other agents for a new DCVax-Direct product composition. Many engineering runs. Data generation for comparability analyses of new reagents vs BCG and new composition of DCVax-Direct vs prior composition. Milestone payment of £
As of March 31, 2025, this milestone had been completed but had not yet been paid. The Company had an accrued liability of $
(d) Technology Transfer: Clean Room Implementation.
After the choice of system (TFF vs commercial) and the choice of product composition are decided, development of new SOPs and transfer of production into the clean rooms. This includes pre-clean room engineering runs, establishment of critical quality attributes, process performance qualifications. For technology transfer into the clean rooms, each operator must pass 3 consecutive and successful aseptic process simulations in the clean room and 3 consecutive and successful PQQ runs at scale in the clean room; microbial analysis (sterility, endotoxin, mycoplasma all need to pass); growth promotion tests; validation of all equipment used after being placed in the clean room; validation of all cell analysis assays used via flow cytometry and validation of the fill and finish protocols. Milestone payment of £
As of March 31, 2025, this milestone had been completed but had not yet been paid. The Company recognized an incremental accrued liability of $
(e) New IMPD and New IND.
Draft a new IMPD (Investigational Medicinal Product Dossier) for the revised DCVax-Direct product composition and production process, containing all changes to the manufacturing system, reagents and product composition, processes, sources and/or Mechanism of Action vs those used in the prior DCVax-Direct program. Also draft a new IND (CMC section), for the first clinical trial with the new manufacturing process and new product composition. Obtain the first approval or clearance of the new IND by a regulator. Milestone payment of £
As of March 31, 2025, this milestone had not been completed. The Company recognized an incremental accrued liability of $
The following table summarizes total research and development costs from Advent for the three months ended March 31, 2025 and 2024, respectively (in thousands).
For the three months ended | ||||||
March 31, | ||||||
| 2025 |
| 2024 | |||
Advent BioServices |
|
| ||||
Manufacturing cost in London | | $ | | |||
Manufacturing cost at Sawston facility |
| |
| | ||
SOW 8 one-time milestones - Cash |
|
| ||||
Expensed and due, but unpaid (milestone complete) (1) |
| |
| — | ||
Expensed but unpaid, not yet due (milestone not yet complete) (2) |
| |
| — | ||
$ | | $ | | |||
| (1) | This covers one-time milestone: Technology transfer: clean room implementation. |
18
| (2) | This convers one-time milestone: Draft new IMPD (Investigational Medicinal Product Dossier) and new IND (CMC section). |
Advent BioServices Sublease Agreement
On December 31, 2021, the Company entered into a Sub-lease Agreement (the “Agreement”) with Advent. The Agreement permits use by Advent of a portion of the space in the Sawston facility, which is leased by the Company under a separate head lease with a different counterparty (Huawei) that commenced on December 14, 2018. The Company subleased approximately
During the three months ended March 31, 2025 and 2024, the Company recognized sub-lease income of $
Related Party Accounts Payable
As of March 31, 2025 and December 31, 2024, there were outstanding unpaid accounts payable and accrued expenses owed to Advent as summarized in the following table (in thousands). These unpaid amounts are part of the Related Party expenses reported in the above section.
| March 31, |
| December 31, | |||
2025 | 2024 | |||||
Advent BioServices - amount invoiced but unpaid | $ | | $ | | ||
Advent BioServices - amount accrued but unpaid (1) | | | ||||
$ | | $ | | |||
10. Preferred Stock
Series C Convertible Preferred Stock
During the three months ended March 31, 2025, approximately
The Company determined that the Series C Shares contain contingent redemption provisions allowing redemption by the holder upon certain defined events (“deemed liquidation events”). As the event that may trigger the redemption of the Series C Shares is not solely within the Company’s control, the Series C Shares are classified as mezzanine equity (temporary equity) in the Company’s condensed consolidated balance sheets.
11. Stockholders’ Deficit
Common Stock
During the three months ended March 31, 2025, the Company received $
19
Stock Purchase Warrants
The following is a summary of warrant activity for the three months ended March 31, 2025 (dollars in thousands, except per share data):
| Number of |
| Weighted Average |
| Remaining | ||
Warrants | Exercise Price | Contractual Term | |||||
Outstanding as of January 1, 2025 |
| | $ | |
| ||
Warrants exercised for cash |
| ( |
| |
| — | |
Warrants expired and cancellation |
| ( |
| |
| — | |
Outstanding as of March 31, 2025 (1) |
| | $ | |
| ||
| (1) | At March 31, 2025, of the approximately |
Warrant Modifications
During the three months ended March 31, 2025, the Company amended certain warrants whereby the maturity dates were extended for an additional approximately 3-6 months. The value of these modifications was calculated using the Black-Scholes-Merton option pricing model based on the following weighted average assumptions.
| Post-modification |
| Pre-modification |
| |||
Exercise price | $ | | $ | | |||
Expected term (in years) |
|
| |||||
Volatility |
| | % |
| | % | |
Risk-free interest rate |
| | % |
| | % | |
Dividend yield |
| | % |
| | % | |
The incremental fair value attributable to the modified awards compared to the original awards immediately prior to the modification was calculated at $
12. Commitments and Contingencies
Operating Lease- Lessee Arrangements
The Company has operating leases for corporate offices in the U.S. and U.K., and for manufacturing facilities in the U.K. Leases with an initial term of 12 months or less are not recorded in the balance sheet. The Company has elected the
The Company’s current office lease in the U.K. will expire in July 2025. In January 2025, the Company entered into a new office lease agreement for the U.K. (the “2025 U.K. Office Lease”). The commencement date for the 2025 U.K. Office Lease is expected to be between May 2025 and November 2025, when the buildout of the office is completed and the Company gains the access to the leased property. The 2025 U.K. Office Lease will expire
On August 22, 2024, the Company extended its office lease in the U.S for an additional
20
At March 31, 2025, the Company had operating lease liabilities of approximately $
Operating Lease - Lessor Arrangements
On December 31, 2021, the Company entered into a Sub - lease Agreement (the “Agreement”) with Advent. The Agreement permits use by Advent of a portion of the space in the Sawston facility, which is leased by the Company under a separate head lease with a different counterparty (Huawei) that commenced on December 14, 2018. The Company subleased approximately
The following summarizes quantitative information about the Company’s operating leases (amount in thousands):
For the three months ended | |||||||||
March 31, 2025 | |||||||||
| U.K |
| U.S |
| Total | ||||
Lease cost |
|
|
|
|
|
| |||
Operating lease cost | $ | | $ | | $ | | |||
Short-term lease cost |
| |
| — |
| | |||
Variable lease cost |
| — |
| — |
| — | |||
Sub-lease income |
| ( |
| — |
| ( | |||
Total | $ | | $ | | $ | | |||
|
|
| |||||||
Other information |
|
|
|
|
|
| |||
Operating cash flows from operating leases | $ | ( | $ | ( | $ | ( | |||
Weighted-average remaining lease term – operating leases |
|
|
| — | |||||
Weighted-average discount rate – operating leases |
| | % |
| | % |
| — | |
For the three months ended | |||||||||
March 31, 2024 | |||||||||
| U.K |
| U.S |
| Total | ||||
Lease cost |
|
|
|
|
|
| |||
Operating lease cost | $ | | $ | | $ | | |||
Short-term lease cost |
| |
| — |
| | |||
Variable lease cost |
| — |
| |
| | |||
Sub-lease income | ( | — | ( | ||||||
Total | $ | | $ | | $ | | |||
Other information |
|
|
|
|
|
| |||
Operating cash flows from operating leases | $ | ( | $ | ( | $ | ( | |||
Weighted-average remaining lease term – operating leases |
|
|
| — | |||||
Weighted-average discount rate – operating leases |
| | % |
| | % |
| — | |
21
The Company recorded lease costs as a component of general and administrative expense during the three months ended March 31, 2025 and 2024, respectively.
Maturities of our operating leases, excluding short-term leases and sublease agreement, are as follows:
Nine months ended December 31, 2025 | $ | | |
Year ended December 31, 2026 |
| | |
Year ended December 31, 2027 | | ||
Year ended December 31, 2028 | | ||
Year ended December 31, 2029 | | ||
Thereafter | | ||
Total | | ||
Less present value discount | ( | ||
Operating lease liabilities included in the Condensed Consolidated Balance Sheet at March 31, 2025 | $ | |
Maturities of our operating leases under the sublease agreement, are as follows:
Nine months ended December 31, 2025 |
| $ | |
Year ended December 31, 2026 |
| | |
Year ended December 31, 2027 |
| | |
Year ended December 31, 2028 |
| | |
Year ended December 31, 2029 |
| | |
Thereafter |
| | |
Total | $ | |
Advent BioServices Services Agreement
On May 14, 2018, the Company entered into a DCVax®-L Manufacturing and Services Agreement (“MSA”) with Advent BioServices, a related party which was formerly part of Cognate BioServices and was spun off separately as part of an institutional financing of Cognate. The MSA provides for manufacturing of DCVax-L products at an existing facility in London. The MSA is structured in the same manner as the Company’s prior agreements with Cognate BioServices. The MSA provides for certain payments for achievement of milestones and, as was the case under the prior agreement with Cognate BioServices, the Company is required to pay certain fees for dedicated production capacity reserved exclusively for DCVax production and pay for manufacturing of DCVax-L products for a certain minimum number of patients, whether or not the Company fully utilizes the dedicated capacity and number of patients. The MSA remains in force until five years after the first commercial sales of DCVax-L products pursuant to a marketing authorization, accelerated approval or other commercial approval, unless cancelled. Either party may terminate the MSA on
22
German Tax Matter
The German tax authorities have audited our wholly owned subsidiary, NW Bio GmbH, for 2013-2015. The NW Bio GmbH submitted substantial documentation to refute certain aspects of the assessments and the German tax authorities agreed in principle with the Company’s proposed revised approach and settlement offer. A final settlement bill was received from the German Tax Authority confirming that only a portion of the original bill was owed, €
Other Contingent Payment Obligation
As of March 31, 2025, the Company had contingent payment obligation of $
13. Subsequent Events
Between April 1, 2025 and May 9, 2025, the Company received $
Between April 1, 2025 and May 9, 2025, the Company issued approximately
Between April 1, 2025 and May 9, 2025, the Company entered into several
Between April 1, 2025 and May 9, 2025, the Company issued approximately
Between April 1, 2025 and May 9, 2025, $
23
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those statements included with this report. In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words “believe,” “expect,” “intend,” “anticipate,” and similar expressions are used to identify forward-looking statements, but some forward-looking statements are expressed differently. Many factors could affect our actual results, including those factors described under “Risk Factors” in our Form 10-K for the year ended December 31, 2024 and in Part II Item 1A of this report. These factors, among others, could cause results to differ materially from those presently anticipated by us. You should not rely upon on these forward-looking statements.
Overview
We are a biotechnology company focused on developing personalized immune therapies for cancer. We have developed a platform technology, DCVax®, which uses activated dendritic cells to mobilize a patient’s own immune system to attack their cancer.
Our lead product, DCVax®-L, is designed to treat solid tumor cancers in which the tumor can be surgically removed. We have completed a 331-patient international Phase III trial of DCVax-L for Glioblastoma multiforme brain cancer (GBM), published the results in the JAMA Oncology peer reviewed journal, and on December 20, 2023 we submitted a Marketing Authorization Application (MAA) for commercial approval in the U.K. We plan to conduct clinical trials of DCVax-L for other solid tumor cancers in the future, when resources permit. Our second product, DCVax®-Direct, is designed to treat inoperable solid tumors. A 40-patient Phase I trial has been completed, and included treatment of a diverse range of more than a dozen types of cancers. We plan to work on preparations for Phase II trials of DCVax-Direct as resources permit.
During the first three months of 2025, the Company continued its progress on multiple fronts, including the following.
MAA Application. The Company and its teams of consultants continued to be actively engaged in the MAA process. As is typical, and as the Company has previously stated, the Company does not plan to make any interim announcements while its MAA is going through the regulatory process. The Company plans to announce the results when the regulatory review and decision-making is finished.
Manufacturing Scale-Up in the Sawston, UK Facility. The Company and Advent proceeded with detailed planning for buildout and equipping of the simplified C lab in the Sawston, UK facility, including contractor and vendor arrangements. Advent devised arrangements to obtain essential equipment for the C lab quickly, and avoid the delivery lead times of 10-12 months. The simplified C lab will enable a substantial scale-up of production capacity in Sawston. As previously reported, the simplified Grade C lab will be adjacent to an existing Grade B lab, making use of existing shell space and drawing upon some of the infrastructure associated with the Grade B lab. This will enable the simplified Grade C lab to be completed for a fraction of the cost and less than half the time for regular Grade C labs.
Manufacturing in the US. The Company continued its discussions with GMP facilities in several states to obtain capacity and availability for potential manufacturing in the US. The Company anticipates reaching an agreement during this summer. The manufacturing is initially contemplated to include DC products involving the IP in-licensed from Roswell Park and the University of Pittsburgh, and then DCVax products.
DCVax-Direct Program. The Company believes it is on track to submit the initial INDs during Q2 of this year, as previously projected, for clinical trials of the Company’s new DCVax-Direct product. The trials are designed to be compact and streamlined, by using Simon two-stage designs to start small (e.g., with just 12-20 patients) and then expand if encouraging results are seen, and by focusing on tumor response endpoints. These trials are the culmination of two years of technology transfer and process development work to establish manufacturing for DCVax-Direct products in Sawston, and to develop a new version of DCVax-Direct to replace an ingredient for which there is a persistent worldwide shortage. During Q1, the final stages of the process were being carried out, including engineering runs and validations.
24
Enhanced DCVax-Direct Products and Upcoming Presentation. The Company continued its internal testing of certain immune booster agents that it has in-licensed, to identify the most useful booster agent(s) and combination(s) of agents for enhanced DCVax-Direct products. The Company currently anticipates making a presentation about this at a scientific conference in June. The Company is also in discussions with clinicians about which version(s) of enhanced DCVax-Direct products should be selected and for which cancers for the initial clinical trials.
Clinical Trials With Roswell and Pittsburgh Technologies. The Company has continued working with Dr. Kalinski and leading clinicians to develop arrangements for compact Simon 2-stage clinical trials of two dendritic cell treatments from the Roswell and Pittsburgh portfolios: DCs loaded with abnormal tumor blood vessel antigens (TBVA), and intra-tumoral injection of unloaded DCs (prepared differently than the Company’s DCVax-Direct products). The US manufacturing arrangements described above will need to be completed to supply the products for these trials.
Technology Targeting In Vivo DCs. While the clinical trials of the Roswell/Pittsburgh DC technologies are waiting for the US manufacturing agreement to be reached and implemented, the Company has identified another technology in the Roswell/Pittsburgh portfolios that could proceed with clinical testing in the meantime. This technology is designed to mobilize the “endogenous” (resident) DCs inside the patient’s body through cytokine conditioning regimens. The treatment agents are biologics, not cells themselves. As a comparison: for DCVax-L, the DC precursor cells are matured and activated ex vivo in the manufacturing facility, and are also “educated” ex vivo by exposure to tumor material in the manufacturing facility. For DCVax-Direct, the maturation and activation take place ex vivo, but the “education” takes place in vivo when the DCs are injected into the tumor and are exposed to the tumor material there. With the cytokine conditioning regimens, all of the steps take place in vivo in the patient’s body. The Company believes this technology can complement the Company’s cell therapies (for example, where patients have exhausted their DCVax doses).
Compassionate Use Programs. The Company continues to receive an ongoing stream of patient requests for compassionate use of DCVax therapies for a variety of cancers. The Company has previously treated compassionate use cases involving a variety of solid tumor cancers with its DCVax therapies. The Company believes that those compassionate use cases have been helpful for the patients involved, and have also generated useful real world data. The Company is expanding its compassionate use programs.
Litigation Progress. The Company continued to vigorously pursue its lawsuit against certain market makers. The Company received a favorable Report and Recommendation from the Magistrate on the last remaining element to be evaluated regarding the sufficiency of the Company’s Complaint: loss causation. The Company also received a favorable decision from the court related to the Defendants’ Motion to Dismiss the Company’s Complaint. The case will now proceed into the long-awaited discovery stage. The Company believes the litigation activities are making important progress, and the Company plans to continue pursuing the cases vigorously. See Part II Item 1, Legal Proceedings, below.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses.
On an ongoing basis, we evaluate our estimates and judgments, including those related to derivative liabilities, accrued expenses and stock-based compensation. We based our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates.
Our critical accounting policies and significant estimates are detailed in our Annual Report on Form 10-K for the year ended December 31, 2024. Our critical accounting policies and significant estimates have not changed substantially from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
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Results of Operations
Operating costs:
Our operating costs and expenses consist primarily of research and development (R&D) expenses. R&D expenses include clinical trial expenses, and increased costs after completion of a Phase III trial, especially for the extensive preparations, and teams of expert consultants, required for an application for product approval.
In addition to clinical trial and post-trial costs, our operating costs may include ongoing work relating to our DCVax products, including R&D, product characterization, manufacturing process development, quality control process development, and related matters. Additional substantial costs relate to the development and expansion of manufacturing capacity.
Our operating costs also include the costs of preparations for the launch of new or expanded clinical trial programs, such as our anticipated trials of combination treatment regimens. The preparation costs include payments to regulatory consultants, lawyers, statisticians, sites and others, evaluation of potential investigators, the clinical trial sites and the CROs managing the trials and other service providers, and expenses related to institutional approvals, clinical trial agreements (business contracts with sites), training of medical and other site personnel, trial supplies and other.
Our operating costs also include legal and accounting costs in operating the Company.
The foregoing operating costs include the costs for Flaskworks’ ongoing operations and intellectual property filings, and the operations of our subsidiaries in the U.K., the Netherlands and Germany.
Research and development:
R&D expenses include costs for substantial external scientific personnel, technical and regulatory advisers, and others, costs of laboratory supplies used in our internal research and development projects, travel, regulatory compliance, and expenditures for preclinical and clinical trial operation and management when we are actively engaged in clinical trials.
Because we are a pre-revenue company, we do not allocate R&D costs on a project basis. We adopted this policy, in part, due to the unreasonable cost burden associated with accounting at such a level of detail and our limited number of financial and personnel resources.
General and administrative:
General and administrative expenses include personnel related salary and benefit expenses, cost of facilities, insurance, travel, legal services, property and equipment and amortization of stock options and warrants.
Three Months Ended March 31, 2025 and 2024
We recognized a net loss of $19.3 million and $18.3 million for the three months ended March 31, 2025 and 2024, respectively.
Research and Development Expense
For the three months ended March 31, 2025 and 2024, research and development expenses were $8.4 million and $7.9 million, respectively. The increase in 2025 was primarily related to an increased cost related to MAA application at the MHRA and the resumption of DCVax-Direct production, and offset by a decrease in stock-based compensation.
General and Administrative Expense
For the three months ended March 31, 2025 and 2024, general and administrative expenses were $9.3 million and $8.1 million, respectively. The increase was mainly related to legal costs.
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Change in Fair Value of Derivatives
We recognized a non-cash gain of $1.3 million and $0.1 million for the three months ended March 31, 2025 and 2024, respectively. The gain was primarily due to the decrease of our closing stock price as of March 31, 2025 and 2024 compared to December 31, 2024 and 2023. The higher gain in 2025 was mainly due to the non-cash revaluation gain recognized as of March 31, 2025 for certain warrants that were reclassified in liability in December 2024.
Change in Fair Value of Convertible Notes
We recognized a non-cash gain of $3.7 million and $1.8 million change in fair value of the convertible notes during the three months ended March 31, 2025 and 2024. The non-cash gain was resulted from the decrease of the Company’s stock price.
Debt Extinguishment
We recognized approximately $7.3 million and $2.2 million debt extinguishment loss during the three months ended March 31, 2025 and 2024 from debt redemptions and debt amendments, respectively. The increase during the three months ended March 31, 2025 compared to last year was due to multiple amendments on the existing convertible notes which resulted a debt extinguishment loss of $5.6 million.
Interest Expense
During the three months ended March 31, 2025 and 2024, we recognized interest expense of $1.6 million and $1.5 million, respectively. The increase in interest expense in 2025 was mainly related to an increase of outstanding debt balance.
Foreign currency transaction gain (loss)
During the three months ended March 31, 2025 and 2024, we recognized foreign currency transaction gain of $1.9 million and a loss of $0.7 million, respectively. The gain was due to the strengthening of the British pound sterling relative to the U.S. dollar and vice versa for the loss.
Liquidity and Capital Resources
We have experienced recurring losses from operations since inception. We have not yet established an ongoing source of revenues and must cover our operating expenses through debt and equity financings to allow us to continue as a going concern. Our ability to continue as a going concern depends on the ability to obtain adequate capital to fund operating losses until we generate adequate cash flows from operations to fund our operating costs and obligations. If we are unable to obtain adequate capital, we could be forced to cease operations.
We depend upon our ability, and will continue to attempt, to secure equity and/or debt financing. We cannot be certain that additional funding will be available on acceptable terms, or at all. Our management determined that there was substantial doubt about our ability to continue as a going concern for at least one year after the annual consolidated financial statements were issued, and management’s concerns about our ability to continue as a going concern within the year following this report persist.
Cash Flow
Operating Activities
During the three months ended March 31, 2025 and 2024, net cash outflows from operations were approximately $9.4 million and $12.4 million, respectively. The decrease in cash used in operating activities was primarily attributable to lower payments for clinical trial related expenditures, insurance costs and certain consulting expenditures.
Investing Activities
We spent approximately $0.1 million and $0.2 million in cash for the purchase of additional equipment and our build-out in Sawston, UK during the three months ended March 31, 2025 and 2024, respectively.
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Financing Activities
We received approximately $5.1 million cash from issuance of 22.7 million shares of common stock during the three months ended March 31, 2025.
We received approximately $3.6 million cash from issuance of 0.3 million shares of Series C convertible preferred stock during the three months ended March 31, 2024.
We received approximately $2.2 million and $7.1 million of cash from issuance of convertible notes to individual lenders during the three months ended March 31, 2025 and 2024, respectively.
We received approximately $5.0 million of cash from the issuance of a loan from a commercial lender during the three months ended March 31, 2025.
We received approximately $17,000 and $1.3 million of cash from the exercise of warrants during the three months ended March 31, 2025 and 2024, respectively.
We received $50,000 from issuance of non-dilutive funding agreements during the three months ended March 31, 2024.
We made aggregate debt payments of $0.6 million during the three months ended March 31, 2025.
Other factors affecting our ongoing funding requirements include the number of staff we employ, the number of sites, number of patients and amount of activity in our clinical trial programs, the costs of further product and process development work relating to our DCVax products, the costs of preparations for Phase II trials, the costs of expansion of manufacturing, and unanticipated developments. The extent of resources available to us will determine which programs can move forward and at what pace.
Off-Balance Sheet Arrangements
Since our inception, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk represents the risk of loss that may result from the change in value of financial instruments due to fluctuations in its market price. Market risk is inherent in all financial instruments. Market risk may be exacerbated in times of trading illiquidity when market participants refrain from transacting in normal quantities and/or at normal bid-offer spreads. Our exposure to market risk is directly related to derivatives, debt and equity linked instruments related to our financing activities.
Our assets and liabilities are overwhelmingly denominated in U.S. dollars. We do not use foreign currency contracts or other derivative instruments to manage changes in currency rates. We do not now, nor do we plan to, use derivative financial instruments for speculative or trading purposes. However, these circumstances might change.
The primary quantifiable market risk associated with our financial instruments is sensitivity to changes in interest rates. Interest rate risk represents the potential loss from adverse changes in market interest rates. We use an interest rate sensitivity simulation to assess our interest rate risk exposure. For purposes of presenting the possible earnings effect of a hypothetical, adverse change in interest rates over the 12-month period from our reporting date, we assume that all interest rate sensitive financial instruments will be impacted by a hypothetical, immediate 100 basis point increase in interest rates as of the beginning of the period. The sensitivity is based upon the hypothetical assumption that all relevant types of interest rates that affect our results would increase instantaneously, simultaneously and to the same degree. We do not believe that our cash and equivalents have significant risk of default or illiquidity.
The sensitivity analyses of the interest rate sensitive financial instruments are hypothetical and should be used with caution. Changes in fair value based on a 1% or 2% variation in an estimate generally cannot be extrapolated because the relationship of the change in the estimate to the change in fair value may not be linear. Also, the effect of a variation in a particular estimate on the fair value of financial instruments is calculated independent of changes in any other estimate; in practice, changes in one factor may result in changes in another factor, which might magnify or counteract the sensitivities. In addition, the sensitivity analyses do not consider any action that we may take to mitigate the impact of any adverse changes in the key estimates.
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Based on our analysis, as of March 31, 2025, the effect of a 100+/- basis point change in interest rates on the value of our financial instruments and the resultant effect on our net loss are considered immaterial.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation as of March 31, 2025, of the design and operation of our disclosure controls and procedures, as such terms are defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based on this evaluation, management concluded that, as of such date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
No change in internal control over financial reporting occurred during the most recent quarter with respect to our operations, which materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
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Part II - Other Information
Item 1. Legal Proceedings
On December 1, 2022, we filed a Complaint in the United States District Court for the Southern District of New York against certain market makers. The Complaint alleges that the defendants engaged in manipulation of the Company’s stock, in violation of the Securities Exchange Act of 1934 and common law fraud, over a period of years. On March 20, 2023, the defendants filed a Motion to Dismiss the Complaint. On April 10, 2023 we filed an Amended Complaint against Canaccord Genuity LLC, Citadel Securities LLC, G1 Execution Services LLC, GTS Securities LLC, Instinet LLC, Lime Trading Corp., and Virtu Americas LLC (Northwest Biotherapeutics Inc. v. Canaccord, et al., No. 1:22-cv-10185-GHW-GWG).
Following defendant’s filing of a new Motion to Dismiss (MTD) and various filings on both sides, an oral argument on defendants’ latest Motion to Dismiss was held on November 14, 2023. The Magistrate Judge issued an 85-page Recommendation and Results Opinion (R&R) for review by the Senior Judge. The Magistrate Judge found that the Company had adequately plead all of the elements of its claim of market manipulation, with the exception of producing enough details for calculating actual damages, known as loss causation. On that basis, he granted defendant’s motion to dismiss without prejudice, subject to the Company’s right to replead on just the question of loss causation, finding that such a filing would “not be futile”.
On February 14, 2024, the Senior Judge issued an opinion accepting all the recommendations and findings of the R&R, and gave the Company 30 days to file this limited repleading amendment on loss causation and damages no later than March 15, 2024. On March 15, 2024, the Company filed their more detailed repleading on loss causation and damages. At the end of March, defendants asked for the right to object to the Judge’s findings against them on December 29, 2023 and February 14, 2024. This motion was denied. The defendants then asked for leave to file a new MTD. That motion was granted with a 30-day filing requirement for defendants and a 30-day response time for the Company.
On May 1, 2024, the defendants’ filed a new MTD the Company’s amended repleading complaint, containing the new section on loss causation and damages. On May 31, 2024, the Company responded to the defendants’ new MTD, supporting the Magistrate Judge’s and Senior Judge’s previous opinions, and rejecting the defendants’ objections to the Company’s loss causation repleading and damage formulae.
On June 14, 2024, the defendants filed their last response to the Company’s comments on May 31, 2024, concerning the defendant’s latest MTD. They also asked the Court to schedule an oral argument on the issues raised by these last two filings. The Court never answered the defendants’ request for an oral argument. On January 31, 2025, the Magistrate Judge issued his second R&R dismissing in part the defendants latest MTD on the basis of plaintiff’s having met the requirements of dismissal based on short-term damages but did not approve it based on the pleadings to date based on longer-term damages.
On February 14, 2025, both Plaintiffs and Defendants filed their respective comments on this latest R&R from the Magistrate Judge and on February 28, 2025, each party filed comments on the other parties February 14, 2025 filings. On March 5, 2025, defendants once again filed a motion seeking an oral argument on the most recent issues raised in the Magistrate Judge’s R&R, and on March 6, 2025, Senior Judge Woods denied the motion in writing without prejudice.
On March 26, 2025, Senior Judge Woods issued his opinion adopting Magistrate Stein’s R&R. On April 4, 2025 the Court granted an extension to the defendants to respond to plaintiffs Second Amended Complaint by April 25, 2025.
This was followed on April 23, 2025 by an Initial Case Management Conference Order for June 5, 2025, requiring the submission of a Joint Proposed Case Management Plan no later than one week prior to the scheduled Conference. Plaintiffs and defendants are currently negotiating that Plan with a major focus on the imminent discovery schedule.
The Company plans to continue its vigorous pursuit of this case.
As previously reported, three stockholders filed in the Delaware Court of Chancery three similar derivative lawsuits against the Company and certain of its directors and officers, including J. Cofer Black, Alton L. Boynton, Leslie J. Goldman, Jerry Jasinowski, Navid Malik, and Linda F. Powers (the “Individual Defendants”), alleging the Individual Defendants (i) breached their fiduciary duties, and (ii) were unjustly enriched by director and officer compensation awarded in 2020 to the Individual Defendants—notwithstanding the fact that approximately 90% of shareholders voted to approve the Company’s executive compensation (the same compensation that these three
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stockholders are seeking to challenge) twice (both through its Say on Pay vote at the Company’s Annual Meeting in 2021, and again in a binding vote at the Company’s Annual Meeting in 2022) and approximately 90% of shareholders also voted to approve the director awards at the 2022 Annual Meeting. On March 31, 2022, the Delaware Court of Chancery consolidated these actions into a single action under the caption In re Northwest Biotherapeutics, Inc. Stockholder Litigation (the “Derivative Action”). The descriptions and summary of the lawsuit herein are qualified in their entirety by reference to the proceedings in the Derivative Action, and are described in greater detail by the Company’s June 3, 2024 Definitive Proxy (the “2024 Proxy”).
On December 30, 2022, following the shareholder approvals at the December 2022 Annual Meeting, the Plaintiff filed an Amended Complaint asserting that the shareholder votes should be deemed ineffective. On February 22, 2023, the Individual Defendants and the Company filed a Motion to Dismiss the Amended Complaint. On November 17, 2023, the court issued an oral decision denying the Motion to Dismiss. On December 20, 2023, the Company filed an answer to the Consolidated Amended Complaint. On December 28, 2023, the Individual Defendants, represented by separate counsel, filed their response to the Consolidated Amended Complaint.
On June 3, 2024, the Company filed the 2024 Proxy which, among other things, asked shareholders to ratify the 2020 option awards that are the subject of the Derivative Action at the Company’s 2024 annual meeting of shareholders (the “2024 Annual Meeting”). On June 20, 2024, the court stayed proceedings in the Derivative Action in light of the potential ratifying effects of the 2024 Annual Meeting. At the Company’s 2024 Annual Meeting, held on June 29, 2024, shareholders holding 88.13% of the shares voted in favor of Proposal 3 (ratification of the 2020 option awards granted to the Company’s four senior executives) and stockholders holding 88.05% of the shares voted in favor of Proposal 4 (ratification of the 2020 option awards granted to the Company’s non-employee directors). On June 30, 2024, the Individual Defendants filed an amended answer to the Consolidated Amended Complaint and have asserted that the claims in the Derivative Action are barred, in whole or in part, by ratification because the Company’s disinterested stockholders ratified the challenged option awards at the 2024 Annual Meeting. The parties are currently seeking guidance from the court regarding the proceedings. On October 31, 2024, the Court gave approval for the parties to file summary judgment motions regarding the effectiveness of stockholder ratification. The Court also permitted discovery regarding ratification.
On December 2, 2024, the Individual Defendants filed their motion for summary judgment and brief in support thereof, arguing that the court should enter judgment in favor of the Individual Defendants on the basis of the stockholders’ June 29, 2024 ratification vote. On January 21, 2025, the Plaintiff—who held approximately 0.00089% of the Company’s outstanding shares of stock as of the ratification record date—served discovery requests. On February 14, 2025, the Court issued a letter opinion ruling that allowing Plaintiff to proceed with “full-blown, plenary discovery” would “defeat[] the purpose” of ratification, because that approach “fails to recognize that the [ratification] vote fundamentally altered the factual landscape of the case.” The Court concluded that “the most efficient framework for addressing the effect of the [ratification] vote” is for the Plaintiff to “serve requests for production of documents that seek to obtain the same types of materials regarding the vote that they could have obtained using [8 Del. C. § 220],” then “file an amended and supplemental complaint that pleads [his] bases for challenging the effectiveness of the vote.” As a result of its decision, the Court denied the Individual Defendants’ motion without prejudice.
Item 1A. Risk Factors
Applicable risk factors are set forth in the Company’s report on Form 10-K for the fiscal year ended December 31, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
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Item 6. Exhibits
21.1 | ||
21.2 | ||
31.1 |
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32.1 | ||
101.INS | Inline XBRL Instance Document. | |
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101.SCH | Inline XBRL Schema Document. | |
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101.CAL | Inline XBRL Calculation Linkbase Document. | |
| ||
101.DEF | Inline XBRL Definition Linkbase Document. | |
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101.LAB | Inline XBRL Label Linkbase Document. | |
| ||
101.PRE | Inline XBRL Presentation Linkbase Document. | |
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in Inline XBRL (included as Exhibit 101). |
* Filed herewith
** Furnished herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
NORTHWEST BIOTHERAPEUTICS, INC | |||
Dated: May 15, 2025 | By: | /s/ Linda F. Powers | |
Name: | Linda F. Powers | ||
Title: | President and Chief Executive Officer | ||
Principal Executive Officer | |||
Principal Financial and Accounting Officer | |||
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