BETHESDA, Md., Sept. 6, 2016 /PRNewswire/ -- Northwest
Biotherapeutics (NASDAQ: NWBO) ("NW Bio" or the "Company"), a
biotechnology company developing DCVax® personalized immune
therapies for solid tumor cancers, today announced that Nasdaq has
accepted NW Bio's proposed remediation plan to resolve Nasdaq's
finding, previously disclosed by the Company, that NW Bio failed to
comply with certain Nasdaq listing rules with regard to certain
securities issuances to Cognate BioServices, Inc.
("Cognate"). As a result of this acceptance, Nasdaq has
notified the Company that it has regained compliance with these
rules, and this matter is now closed.
During peak enrollment and expense periods in both the Company's
Phase III clinical trial of DCVax®-L for GBM brain cancer and the
Company's Phase I/II clinical trial of DCVax®-Direct for all types
of inoperable solid tumors, the Company paid substantial portions
of Cognate's invoices in restricted stock rather than cash, in
order to conserve Company resources, pursuant to agreements entered
into in July, 2013 (the "2013 Agreement"), and January, 2014 (the
"2014 Agreements). These payments in stock in lieu of cash
enabled both of the clinical trials to proceed at full speed during
2013-2015, without suspension or reduction of the trials such as
had occurred during the 2008-2011 financial crisis years, which
would not otherwise have been possible.
The issuances to Cognate were unregistered restricted shares,
were not thereafter registered despite contractual obligations for
the Company to register them, and were subject to multi-year
vesting and multi-year lock-up periods which prevented Cognate's
shares from coming into the market. Since the Contracts
precluded Cognate for years from monetizing any of the shares it
received in lieu of cash payment of its invoices, the Contracts
also included most favored nation anti-dilution provisions such
that if the Company entered into transactions with unrelated
investors or creditors at a lower price per share while Cognate was
locked up, then the terms of Cognate's securities would be
conformed to the terms of the unrelated investors or creditors.
On April 26, 2016, NW Bio received
a letter from Nasdaq stating that, in Nasdaq's view, the Company's
issuance of unregistered restricted stock and warrants to Cognate
under the 2014 Agreements violated Nasdaq's listing rules.
The violation resulted from the combined effects of several
factors, including the fact that, under Nasdaq's rules, all of the
issuances in 2014 and 2015 under the 2014 Agreements are aggregated
for purposes applying the rules, the fact that the stock issuances
to Cognate were deemed to have been "below market" under Nasdaq's
criteria (which do not permit recognition of the fact that the
securities were unregistered and were subject to a multi-year
lock-up), and the fact that the 2014 Agreements included most
favored nation anti-dilution ("MFN") provisions (as did the 2013
Agreement).
These factors, the circumstances involved, and the Nasdaq
determinations are described in detail in the Company's filing on
Form 8-K with the SEC today.
After lengthy discussions with Nasdaq and extensive negotiations
with Cognate, the matter has been resolved with Nasdaq's acceptance
of a remediation plan under which:
(a) Cognate will return and the
Company will cancel 8,052,092 restricted shares previously issued
to Cognate under the MFN provisions of the 2014 and 2013
Agreements, and the MFN provisions will be deleted from those
Agreements;
(b) Cognate will return and the
Company will cancel warrants for 6,880,574 shares issued under the
2014 Agreements and the Company will issue to Cognate new warrants
for 4,305,772 shares at a higher exercise price (resulting in a net
reduction of 2,574,802 warrants held by Cognate); and
(c) Cognate will return and the
Company will cancel 731,980 of the total of 5,101,330 restricted
shares initially issued under the 2014 Agreements, so that the
effective issuance price of the remaining shares will be adjusted
to the market price on the date of those Agreements, as measured
using Nasdaq's criteria.
The Company will proceed with the registration of all shares and
warrants held by Cognate, as was already required under the 2014
and 2013 Agreements for all securities issued thereunder.
The remaining portions of the multi-year lock-up periods
relating to shares and warrants held by Cognate will be
cancelled. Most of the lock-up periods have already taken
place, with Cognate having been locked up during those
times.
As a result of the foregoing, overall Cognate will return and
the Company will cancel a total of 8,784,072 shares, and the
warrants held by Cognate will be reduced by 2,574,802.
The Nasdaq settlement does not affect other obligations of the
Company to Cognate, including for existing unpaid invoices.
About Northwest Biotherapeutics
Northwest Biotherapeutics is a biotechnology company focused on
developing personalized immunotherapy products designed to treat
cancers more effectively than current treatments, without
toxicities of the kind associated with chemotherapies, and on a
cost-effective basis, in both the United
States and Europe. The Company has a broad platform
technology for DCVax dendritic cell-based vaccines. The
Company's lead program is a 348-patient Phase III trial in newly
diagnosed Glioblastoma multiforme (GBM), which is on a partial
clinical hold in regard to new screening of patients. GBM is
the most aggressive and lethal form of brain cancer, and is an
"orphan disease." The Company is under way with a 60-patient
Phase I/II trial with DCVax-Direct for all types of inoperable
solid tumor cancers. It has completed enrollment in the Phase
I portion of the trial. The Company previously conducted a
Phase I/II trial with DCVax-L for metastatic ovarian cancer
together with the University of
Pennsylvania. The Company previously received
clearance from the FDA for a 612-patient Phase III trial in
prostate cancer. In Germany,
the Company has received approval of a 5-year Hospital Exemption
for the treatment of all gliomas (primary brain cancers) outside
the clinical trial.
Disclaimer
Statements made in this news release that are not historical
facts, including statements concerning future treatment of patients
using DCVax and future clinical trials, are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Words such as "expect," "believe,"
"intend," "design," "plan," "continue," "may," "will,"
"anticipate," and similar expressions are intended to identify
forward-looking statements. Actual results may differ
materially from those projected in any forward-looking
statement. Specifically, there are a number of important
factors that could cause actual results to differ materially from
those anticipated, such as risks and uncertainties related to the
actions and decisions of Nasdaq and Cognate, the Company's ongoing
ability to raise additional capital, risks related to the Company's
ability to enroll patients in its clinical trials and complete the
trials on a timely basis, uncertainties about the clinical trials
process, uncertainties about the timely performance of third
parties, risks related to whether the Company's products will
demonstrate safety and efficacy, risks related to the Company's and
Cognate's abilities to carry out the intended manufacturing and
expansions contemplated in the Cognate Agreements, risks related to
the Company's ability to carry out the Hospital Exemption program
and risks related to possible reimbursement and pricing.
Additional information on these and other factors, including Risk
Factors, which could affect the Company's results, is included in
its Securities and Exchange Commission ("SEC") filings.
Finally, there may be other factors not mentioned above or included
in the Company's SEC filings that may cause actual results to
differ materially from those projected in any forward-looking
statement. You should not place undue reliance on any
forward-looking statements. The Company assumes no obligation
to update any forward-looking statements as a result of new
information, future events or developments, except as required by
securities laws.
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SOURCE Northwest Biotherapeutics