When company officials from Northwest Biotherapeutics Inc. met with would-be financiers from Toucan Capital II LP at 2004's JPMorgan Healthcare Conference, NBI was "quite literally a week from closing its doors," recalled Alton Boynton, president, chief operating officer and co-founder of NBI.

The annual meeting previously called "H&Q" is known as a venue for hookups of that kind, but NBI had become what investors might regard as a sorry case - on the decline since going public despite a harsh market in 2001.

"That was a very difficult time to do an IPO, but needless to say we got it off and brought in about half the capital we needed," Boynton recalled. "We went out for $40 million and came back with $20 million. We knew from the get-go we didn't have enough."

Not enough, that is, to advance its DCVax products for prostate, non-small-cell lung and brain cancers. The "deep freeze" in the capital markets continued, and November 2002 found NBI with only $2.9 million in cash. The company made cuts, suspending all DCVax clinical trial activity.

"We looked carefully at our product candidates, the clinical data and what was in the pipeline and focused the company very strategically," Boynton said, noting that the DCVax-Prostate candidate was "far along. We had actually accrued and treated a few patients" in a Phase III trial.

The product looked promising. Targeting non-metastatic, hormone-independent prostate cancer (for which there is no FDA-approved product), it emerged from NBI's dendritic cell-based immunotherapy platform. White blood cells are separated from the patient's blood at a clinical site and shipped to a processing center, where peripheral mononuclear cells are isolated, put in vials and stored in liquid nitrogen.

The cells are thawed and cultured for seven days with processing and maturation factors, after which they are put in vials again, frozen, tested, released and shipped back to the clinical site for injection. Or they might be pulsed with tumor lysate, tumor-related antigens or antigen-associated peptides, then frozen, tested, released and shipped for use.

Boynton estimated "at least 100,000 new cases per year, somewhere in that range," of non-metastatic, hormone-independent prostate cancer.

"The typical therapy is watch and wait," he said. "The hormones no longer work, so they wait until they see metastatic disease," at which time a drug such as the recently approved Taxotere (docetaxel), a chemotherapeutic agent from Sanofi-Aventis Group, might be tried.

"It's not pretty," Boynton said. Though billed as less toxic than other chemo drugs, Taxotere still is much harder to tolerate than NBI's approach, he added.

DCVax-Prostate's indication is "different from what Dendreon and Cell Genesys and most other companies" are targeting, too, he told BioWorld Financial Watch, referring to other firms with designer, cell-based therapies in the works for prostate cancer.

"I don't think anybody else is in a Phase III in this population," he said.

Cell Genesys Inc.'s GVAX is a whole-cell vaccine designed to stimulate an immune response against a patient's tumor, made of genetically modified tumor cells that secrete granulocyte macrophage-colony stimulating factor. Cell Genesys has agreed with the FDA on a special protocol assessment for an upcoming Phase III trial in hormone-refractory prostate cancer patients, and the vaccine performed well in Phase II.

Dendreon Corp.'s Provenge has fared less well. In January, the firm's stock plummeted more than 26 percent on word that the final analysis of the primary endpoint - time to disease progression - in the Provenge study known as D9902A did not reach a statistically significant delay in the overall group or in the Gleason score subgroups. D9902A enrolled 98 men with asymptomatic, metastatic, androgen-independent prostate cancer.

Dendreon, at least, managed to finish a Phase III trial, and had some promising indicators. Interim analysis of overall survival in the intent-to-treat patient population, which was the secondary endpoint, found the Provenge survival rates and the median survival benefit compared to placebo were similar to the results in the final, three-year survival analysis of the D9901 study, reported in October.

NBI had reached despair over whether it would ever have Phase III data - good, bad or mixed - to report. Along came Toucan, a $120 million venture capital fund focused on seed and early stage life science and advanced technology investments that launched its first fund in 1997.

In April, after "three months of heavy due diligence," Toucan entered a recapitalization agreement with NBI that could provide the company with up to $40 million through the issuance of new securities to Toucan and a syndicate of investors.

"That's a process, and we didn't begin the financing until the [2005] JPMorgan meeting," Boynton said. "We've talked to a lot of [would-be investors] and continue to do so."

Getting approval from shareholders for the recapitalization was somewhat dicey, Boynton said, but they "overwhelmingly" came through in the end. "They had seen the company start at [a share price of] $5 and end up at 4 cents," he said, and the vote came down to recapitalization or bankruptcy.

NBI so far has received $5.65 million from Toucan in support of programs and company restructuring. A larger bolus of cash could "come all at once or it could come at various tranches at different valuations," Boynton said. Meanwhile, the FDA last week cleared NBI to start accruing its Phase III trial with DCVax-Prostate and NBI is searching for a contract research organization to help, since the company remains small.

"We're still five people," he said.

The FDA also has given its blessing for a Phase II trial with a DCVax product for glioblastoma multiforme. The trial is expected to start later this year. Preclinical work has been done for a Phase I trial for non-small-cell lung cancer and head and neck cancer, too.

Existing data with the brain cancer therapy are "outstanding," Boynton said. "It's a small number of patients, but they're outstanding. We believe an immunotherapy approach belongs in a disease with minimum tumor burden, and after surgery and radiation the brain is in that condition, as is the patient population we're treating with the prostate [therapy]."

As of Sept. 30 - the last quarterly report - NBI had $111,000 in cash and cash equivalents. How long can the company operate on its current funding, if the worst occurs and no more is forthcoming?

"That's an interesting question, and I don't think I can answer it," Boynton said, but he vowed the company would not start a Phase III trial it can't finish.

"We won't let that happen," he said.

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