NORTHWEST BIOTHERAPEUTICS INC
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
NWBO$0.19-0.6%Stored close · as of Jun 30, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-05.
0001410578-24-000133
Item 7. Management’s Discussion and Analysis of Financial Condition And Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001410578-25-000598
Item 7. Management’s Discussion and Analysis of Financial Condition And Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 112 previous paragraphs and 115 current paragraphs.
47 unchanged; 26 reworded; 40 added; 39 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 12 previous and 29 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (40)
Current report
Intensive activities continued throughout 2024, including in Q4, in multiple areas including the following:
Current report
These activities continued to require extensive use of specialized technical and regulatory consultants and legal counsel, with the costs of these services alone totaling about one-third of all costs incurred by the Company for the year (about $18 million). Costs incurred just for the GMP facilities themselves - not including any personnel or program costs - continued to be very expensive (multi millions) as is typically the case for GMP clean room facilities. In addition, some costs that may be minor in other types of businesses are substantial in the Company’s business (e.g., $5 million per year for insurance coverages).
Current report
Marketing Authorization Application (MAA) and Inspections. The Company continued working with teams of specialized consultants on the MAA process, including onsite inspections in the U.K. and U.S., and ongoing production of documents and information before, during and after the inspections. The Company is actively engaged in the ongoing process, and the Company has decided not to attend ASCO this year in order to stay focused on interactions with the MHRA and efforts to move forward as quickly as possible. As previously reported, the Company plans to announce the results when the MHRA review and decision-making is finished and does not plan to provide interim updates.
Current report
Planning for Possible Initial Commercialization. The Company’s contract manufacturer, Advent BioServices, has prepared plans for how the manufacturing of DCVax-L products could be ramped up in the event of potential commercialization using just the existing two manufacturing suites and facilities, and could potentially reach a significant portion of the Glioblastoma patients in the UK. The plans include a transition from a single daily shift of operations to two shifts daily, supply chain considerations and determination of the personnel that would be required. The plans also include potential arrangements for a simplified initial Grade C lab, as described below. Advent estimates that this simplified initial Grade C lab could enable doubling of the production that would be feasible with the existing two manufacturing suites. Arrangements with private clinics have also been developed, as described below, which could potentially assist with initial commercialization. In addition, during 2024, the Sawston facility received its first regulatory inspection under the MIA license that was approved by the MHRA in March 2023 for commercial manufacturing of cell therapy products. This was an important milestone to confirm that the Sawston facility is operating on an ongoing basis at the level required for potential commercial operations
Current report
Simplified Grade C Lab in the Sawston Facility. The Sawston facility current has two Grade B labs. Such labs are required to be used for any manufacturing process that involves any open steps (i.e., open to the air). Grade C labs are much less expensive to operate, and allow multiple patients’ products to be manufactured at the same time in the same lab, but may only be used with closed systems. The Flaskworks system is closed and suitable for Grade C labs. The design and engineering works were previously completed for two Grade C labs, but the buildout will require substantial capital. Since the Company believes it will have adequate capacity for initial possible commercialization with the two Grade B labs, the Company has held off on raising and using the capital required to build the two Grade C labs. Meanwhile, Advent has devised plans for a simplified initial Grade C lab adjacent to one of the Grade B labs, making use of existing shell space and drawing upon some of the infrastructure associated with the Grade B lab. The simplified Grade C lab can be completed for a fraction of the cost and less than half the time for the regular Grade C labs. The Company anticipates potentially proceeding with this in the coming months when appropriate.
Current report
Potential Manufacturing in the US. During much of 2024 and Q1 2025, the Company has been in discussions with a series of half a dozen independent parties with GMP facilities in diverse areas of the US, to obtain capacity and availability for potential manufacturing in the US. The manufacturing is initially contemplated to include DCVax-L products and DC products involving the IP in-licensed from Roswell Park and the University of Pittsburgh.
Current report
Pediatric Brain Cancer Trial. The Company worked throughout the year to obtain engagement of pediatric neurosurgeons and neuro-oncologists for the pediatric trial that is legally required in connection with the MAA application for adult patients. The clinicians requested substantial changes in the trial design and plans that had been approved by MHRA. After a long process, a new trial design was agreed by the clinicians. The Company plans to obtain MHRA approval of the new design and move forward with the trial in due course.
Current report
Applications for Approval in Additional Countries Beyond the UK. During Q4 2024, the Company engaged specialized consultants to review the regulatory requirements for submission of an application for product approval in certain additional countries beyond the UK, review the MAA package that the Company submitted in the UK, and determine what changes or additions would be needed to adapt the MAA package for certain other applications. The Company’s work with these consultants is ongoing.
Current report
Reimbursement. The Company has been working with its specialized reimbursement consultants to evaluate the categories of review processes which could potentially apply to the Company’s DCVax-L product for Glioblastoma brain cancer (GBM). The Company and its consultants are gathering information needed for the health economics and outcomes (HEO) analyses, and analyses of the relevant clinical landscape.
Current report
Compassionate Use Program. The Company receives an ongoing stream of requests from patients and physicians for compassionate use of its DCVax products for a variety of cancers and patient situations. The Company has been operating a Specials program in the UK for a number of years to try to help brain cancer patients where it can. During 2024, the Company established collaborations with several private clinics in London to enable the Specials program to be expanded and increased. The Company is in the process of making the operational arrangements to implement these clinic collaborations for an expanded program. The Company is also working on significant cost reductions. The Company believes that having these private clinic arrangements in place will also be quite helpful for initial potential commercialization.
Current report
DCVax-Direct Manufacturing. The Company’s contract manufacturer, Advent BioServices has completed the long process of developing the DCVax-Direct manufacturing process in the UK and is ready to proceed with production of DCVax-Direct for clinical trials commencing in Q2 2025. This process has taken nearly two years, in between priority work related to the MAA, and has involved a number of stages including technology transfer to the U.K, development of new SOPs (Standard Operating Procedures) and regulatory documents, identification and evaluation of commercially available systems to substitute for the TFF system previously used for the DCVax-Direct production, engineering runs and data generation to confirm comparability, etc.
Current report
New DCVax-Direct Product (DCVax-DR). Advent has also completed the long process of developing a new formulation of DCVax-Direct (referred to as DCVax-DR). As previously reported, it was necessary to develop second version of DCVax-Direct because of a persistent worldwide shortage of a key ingredient in the original DCVax formulation (an immune booster ingredient). Developing the second formulation required research into a range of other candidate ingredients to identify ones with sufficiently similar properties or immunological results, testing to determination the appropriate amount and methods of incorporating such candidate ingredients, further testing and data generation to confirm comparability, and development of new SOPs and other regulatory documents. In parallel, Advent has also undertaken extensive efforts to secure supplies of the original booster ingredient, and has found a suitable source. The Company plans to have Advent produce the original formulation of DCVax-Direct as well as the DCVax-DR formulation, and to test both in further clinical trials for optimal results.
Current report
DCVax-Direct Clinical Trials. The Company has been preparing for resumption of clinical trials of DCVax-Direct for quite a while, and plans to conduct those trials in the U.S. The Company has been working with clinicians for months to design the first two trials (one pediatric, one adult). The protocol for the first trial has been drafted, discussed and agreed with the clinicians and is in late stage review by the clinicians and their institution. The protocol for the second trial has been drafted and is undergoing discussion and modifications with the clinicians. The Company plans to submit both studies to the FDA in Q2 2025, and plans to announce the details after they have been cleared by the FDA. These trials have particularly been designed to be compact and streamlined, using Simon’s two-stage designs to start small and then expand if encouraging results are seen, and focusing on tumor response (shrinkage) endpoints which have a much faster timeframe than time-to-event endpoints such as overall survival, which do not require any control arms and which can be much smaller and more economical trials for value creation. The Company’s prior Phase 1 trial at MD Anderson covered 13 diverse types of solid tumors in very late stage patients with multiple inoperable tumors who had failed all standard treatments. The trial results were very encouraging and the Company is building on those results in several ways for the upcoming trials.
Current report
Clinical Trials With Roswell and Pittsburgh IP. The Company has been working with Dr. Kalinski and leading clinicians to develop arrangements for clinical trials of two dendritic cell treatments from the portfolios in-licensed by the Company from Roswell Park and the University of Pittsburgh. One of the DC treatments involves loading DCs with abnormal tumor blood vessel antigens (TBVA), and the other involves intra-tumoral injection of unloaded dendritic cells (similar to the Company’s DCVax-Direct but with the DCs prepared differently and having different properties). Each of these two products is anticipated to be applicable to most types of solid tumors. The DCs loaded with TBVA have already been tested in a Phase 1 trial for melanoma and the results were encouraging. The trials being planned will utilize Simon’s two-stage designs in order to start small and then expand only if encouraging results are seen. These trials
Current report
will also use Simon’s two stage designs and will focus on tumor response endpoints in order to be compact and efficient. These trials are separate from the investigator-sponsored trials in the portfolios licensed from Roswell and Pittsburgh.
Current report
Flaskworks System. During 2024, the Company’s Flaskworks team and Advent, together with a specialized external contractor, completed the design work for a GMP-compatible second prototype of its system for closed preparation of DCVax-L products. An initial prototype had been completed in 2023. The second prototype included upgraded functionality, however it was also considerably larger than the first prototype as a result, and the effect would be to reduce the number of systems that could fit in each Grade C lab and hence reduce the amount of products that could be produced. After further evaluations, the Company decided to go forward with the first prototype. The Company has arranged for another specialized external contractor (in the UK), has brought that contractor up to speed and has that contractor standing by to fabricate GMP units of the first prototype as soon as the Company is ready. The Flaskworks units will only be usable in the Grade C labs, and hence are not useful until the Grade C labs have been constructed, validated and are operational. Since the timeframe for fabricating the Flaskworks units is much shorter than the timeframe for buildout of the Grade C labs (including the simplified initial Grade C lab), the Company has been holding off on proceeding with the fabrication until closer to the time when the initial Grade C lab will be operational.
Current report
Commercial Collaborations. The Company has undertaken discussions and negotiations with a number of companies who have products that could serve as booster agents either in the manufacturing of DCVax products or in combination treatment regimens with DCVax or both. The Company has completed a License and Supply Agreement with a company for one such agent, which is a TLR (toll like receptor) agonist, and the Company is now in the process of collaborating with that Company to design a clinical trial of a combination treatment regimen. The Company has already identified lead investigators for this trial, and anticipates submitting the IND for this trial to the FDA in Q2 2025. The Company plans to announce the trial when the IND has been cleared by the FDA. The Company is also testing this TLR agonist in its internal lab research on enhanced versions of DCs, as described below.
Current report
The Company has been in discussions since mid-2024 with a different company to in-license a different type of booster agent – one that big pharma has been trying for years to develop as a treatment itself. The Company executed a Material Transfer Agreement with that company and has been testing samples of this agent in internal lab research as described below. The Company has also been in negotiations since early Q4 2024 for potential acquisition of another company with a dendritic cell related technology. The Company hopes to complete these negotiations during Q2 or Q3 2025.
Current report
Internal Lab Research on Booster Agents. The Company has developed a substantial portfolio of agents that have already been in-licensed or are in discussions for in-licensing, and that may further boost the potency of the dendritic cells in DCVax products. The Company believes that administering an extra potent DCVax treatment may be helpful in its clinical trials going forward, as those trials will be focusing on tumor response (shrinkage) endpoints.
Current report
The Company has been conducting lab research in-house in its Flaskworks facility to test the effects of these booster agents alone and in combination, in both DCVax-L and DCVax-Direct products. The results have differed in the DCVax-L dendritic cells vs. the DCVax-Direct dendritic cells, and have varied according to the dose, the timing, the combinations and other factors. It appears that some of this research may potentially create some new IP. The Company plans to continue this lab research while the initial clinical trials of DCVax-Direct get under way, and then plans to select the most useful booster agent(s) or combination(s) to produce enhanced versions of DCVax products for testing in additional trial cohorts.
Current report
Intellectual Property. The Company continued to devote substantial resources to building its patent portfolio as a key part of building its franchise in dendritic cell technologies. During 2024, 6 new patents were issued to us related to DCVax products and processes, and 10 new patents were issued or allowed relating to Flaskworks technologies. As of December 31, 2024, we had built an overall portfolio of more than 55 issued patents (including European validations) and more than 65 pending patent applications (including European validations) worldwide, grouped into a number of patent families. In addition, the Company is continuing to in-licensed patents developed by others which it believes add further breadth and strategic value.
Current report
*Positive Progress in Litigation.*Throughout 2024, the Company devoted significant amounts of bandwidth and resources to litigation activities, and the Company plans to continue doing so. The Company believes the litigation activities are making important progress. See Item 1, Legal Proceedings, above.
Current report
Fair Value of Financial Instruments
Current report
ASC 820, Fair Value Measurements, provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.
Current report
The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes:
Current report
Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
Current report
The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. As a result of entering into a convertible debt instrument (see Note 7) for which such instrument contained a variable conversion feature with no floor price, the Company has adopted a sequencing policy as described below within Note 3 in accordance with ASC 815-40-35-12 “Derivatives and Hedging” (provides comprehensive guidance on derivative and hedging transactions) whereby all future instruments may be classified as a derivative liability with the exception of instruments related to share-based compensation issued to employees or directors.
Current report
Recently Adopted Accounting Standards
Current report
Improvements to Reportable Segment Disclosures
Current report
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Improvements to Reportable Segment Disclosures (Topic 280)” which is intended to improve reportable segment disclosure requirements, primarily through incremental disclosures of segment information on an annual and interim basis for all public entities. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. The ASU is to be applied retrospectively to all prior periods presented in the financial statements and is effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and interim periods thereafter. The Company adopted this guidance with no material impact on its consolidated financial statements, and our expanded disclosures are included below under “Segment Information.”
Current report
We recognized a net loss of $83.8 million and $62.6 million for the years ended December 31, 2024 and 2023.
Current report
for a total year over year increase of approximately $7.2 million in Research and Development expenditures involving substantial progress on some of the Company’s most important programs.
Current report
The increase of $3.3 million in 2024 compared to 2023 was mainly related to an increase of $3.8 million in legal expenses, which was partially offset by a decrease of $0.4 million related to stock-based compensation.
Current report
We recognized a non-cash gain of $7.7 million and a non-cash loss of $2.0 million from the change in fair value of the convertible notes during the year ended December 31, 2024 and 2023, respectively. The gain during the year ended December 31, 2024 was primarily due to the decrease of stock price as of December 31, 2024 compared to December 31, 2023. The loss during the year ended December 31, 2023 was primarily due to the increase in the stock price as of December 31, 2023 compared to the stock price on the issuance dates in August and September 2023.
Current report
We recognized approximately $14.4 million and $5.4 million debt extinguishment loss during the year ended December 31, 2024 and 2023, respectively, from debt redemptions and debt amendments. The increase during the year ended December 31, 2024 compared to the year ended December 31, 2023 was mainly due to multiple amendments on the existing convertible notes at fair value which resulted an aggregate debt extinguishment loss of $8.7 million.
Current report
Loss from Issuance of Debt
Current report
During the year ended December 31, 2024, we recognized an $0.8 million loss from the issuance of the Yorkville Note, which we elected to account for under the FVO. The estimated fair value of the Yorkville Note on the issuance date was approximately $5.8 million, which resulted in a loss of $0.8 million calculated at the difference between the principal amount and the fair value of the Yorkville Note.
Current report
Loss from warrant modification
Current report
During the years ended December 31, 2024, we recognized an $0.8 million loss from warrant modifications related to an amendment to certain warrants that were liability classified and such amendment was in conjunction with an equity offering.
Current report
We received approximately $14.2 million from issuances of common stock during the year ended December 31, 2024.
Removed paragraphs (39)
Previous report
During 2023, we completed or made substantial progress on all of the key areas that we outlined at the Annual Meeting in December 2022 as priorities for the following 12-18 months, as well as some additional areas not outlined at the Annual Meeting.
Previous report
Sawston Facility Development. We continued the development of our GMP facility in Sawston UK. We believe that the facility is a major asset and that the ongoing development is materially further enhancing its value.
Previous report
Product Release Improvements. We continued to streamline processes related to product release. After manufacturing, medical products must go through a range of “release tests” - i.e., quality control and other tests (composition, purity, potency, sterility, etc.) to be approved for release for use in patients. In order for scale-up of manufacturing to be effective, the product release process must also be streamlined and scaled up so that it is not a bottleneck. This is an important part of overall preparations for commercialization and is particularly critical for autologous (personalized) products, for which each “batch” of product that is released is only for one patient. We have been
Previous report
working on this for years and made substantial progress in 2023. Activities have included partial automation and acquiring specialized equipment and bringing in-house some key tests previously conducted by outside specialized vendors.
Previous report
Flaskworks. Major progress was made in 2023 in the development of the Flaskworks system for a “closed” manufacturing process for DCVax-L. We completed the evaluation of three fundamentally different process approaches that the Flaskworks system could take, and chose the one that we believe will be optimal both operationally and to facilitate regulatory approval. We also completed most of the functional optimization of the Flaskworks system itself. A specialized contractor was engaged to produce GMP-compliant (i.e., clinical grade) versions of the prototype Flaskworks machine made with GMP grade materials. When the GMP-grade units are delivered, Advent BioServices will undertake qualification and validation of those units, conduct engineering runs and collect data, and apply to regulators for approval to use the system to produce DCVax-L for patients. As previously reported, the Company views the Flaskworks program and system as a centerpiece of efforts toward scale-up for potential commercial operations.
Previous report
Supply chain issues and equipment backlogs continue to be factors affecting operations both for Advent and for Flaskworks. However, the work of both Advent and Flaskworks is progressing in spite of these issues.
Previous report
Intellectual Property. We further strengthened our intellectual property portfolio in three ways during 2023: we achieved issuance of certain patents previously filed, we filed new patent applications based on our own work, and we in-licensed patents and patent applications from other parties. We are continuing to build an IP portfolio that we believe will provide a strong foundation to help us build a leading franchise in dendritic cells and active immunotherapies. This includes enhanced versions of dendritic cells, combinations of other agents with dendritic cells, manufacturing methods and processes, and related IP.
Previous report
Collaborations. The Company continued active discussions on certain combination treatment regimens and is planning for certain strategic trials with such combination treatments. Some of these would be in connection with the Company’s in-licensing of intellectual property and others would be separate collaborations. The Company anticipates proceeding with such an initial combination during 2024 when it is able to free up sufficiently from the MAA review process and the inspections processes.
Previous report
Expansion of the SAB: addition of Dr. Linda Liau. We were pleased to expand our Scientific Advisory Board during 2023 with the addition of Dr. Linda Liau, Chairman of the Neurosurgery Department at UCLA and the Principal Investigator in the Phase 3 trial of DCVax-L for GBM.
Previous report
Mechanism of Action data and analyses. During 2023, we completed and publicly presented key information about the mechanism of action (MoA) of DCVax-L. We have undertaken such analyses over time, as technology tools have advanced - including recent advances in proteomics. The analyses completed and presented in 2023 provided strong support for what we believe are the keys to the treatment effects observed with DCVax-L and are the key differentiators of DCVax-L vs. other cancer treatments for glioblastoma (GBM) and other solid tumors: namely, that DCVax-L is abroad-spectrum treatment and it is aiming at personalized tumortargets that are actually present on the patient’s version of the tumor. The MoA studies showed that the dendritic cells in DCVax-L processed and presented well over 600 peptide antigens (all drawn from a sample of the patient’s own tumor) to the T cells. The antigens presented by the DCs become targets for T cells to attack. The MoA studies also showed that a very large number and diversity of T cells responded, and that the depth and breadth of the T cell response increased over time following DCVax-L treatments, ranging ranged from several hundred to as many as 1200 different T cell clones. Each T cell clone addresses a distinct tumor target. We believe that the data from these MoA studies provide important support for the extended survival seen in our Phase 3 clinical trial of DCVax-L for GBM and will be helpful in the regulatory review of our MAA application for commercial approval.
Previous report
Continued compassionate use (Specials) patients. We continued treating compassionate use cases of GBM patients. We believe these treatments are helpful for the patients, and these cases are also helping us prepare for real world circumstances that we are likely to encounter in potential commercialization and that are much more diverse than in clinical trials. For example, the compassionate use cases include patients who have continued to receive DCVax-L treatments over many years (including having a second batch of DCVax-L doses made after the first batch of doses was exhausted), patients who are older than the age range in the clinical trials, and a patient with an enormous (14 cm.) GBM tumor of which only half could be removed by surgery and the remaining half regressed with treatment by DCVax-L and nutritional support for the immune system (case study accepted for peer reviewed publication).
Previous report
Continued survival follow-up on patients in the Phase 3 trial. The contract research organization (CRO) managing the Phase 3 trial continued to conduct long-term follow-up on patients from the Phase 3 trial as there are still patients alive.
Previous report
Drafting and submission of the MAA. We worked with consultants throughout the year to draft the MAA application package and supporting documents and exhibits. Advent BioServices undertook much of the work with specialized consultants to prepare the CMC (product related) sections of the MAA and those supporting documents and exhibits. The MAA was completed and filed with the UK MHRA on December 20, 2023.
Previous report
Activities associated with the MAA. In parallel with the drafting of the MAA itself, in 2023 we undertook a large-scale program of preparations for inspections. The regulatory authorities will conduct comprehensive inspections of the CRO, the TMF, the database provider, the sponsor, key trial site hospitals, the contract manufacturer and others. The Company worked throughout most of 2023 with large teams of consultants on preparations for inspection readiness of all parties and the TMF. Multiple mock inspections were arranged and were conducted by former regulatory agency inspectors in Q4. Further inspection readiness preparations are expected to continue to be a major focus of the Company and the large teams of consultants in the first half of 2024. During 2023 the Company also devoted substantial efforts to preparations for launching the two required pediatric clinical trials.
Previous report
Lawsuit against market makers. The Company continued vigorously pursuing its lawsuit against certain market makers whom the Company believes have engaged in manipulation of its stock. Following the Company’s filing of its Complaint in December 2022, during 2023 the case proceeded through multiple rounds of court filings as described in Item 3 Legal Proceedings above. The Company plans to continue the vigorous pursuit of the case.
Previous report
Future directions. In the future, we also plan to restart our DCVax®-Direct clinical development program as soon as resources permit.
Previous report
Fair Value Measurements
Previous report
●Level 1 - defined as observable inputs such as quoted prices for identical instruments in active markets;
Previous report
●Level 3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)
Previous report
On January 9, 2023, the Company filed a Certificate of Amendment of its Seventh Amended and Restated Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary of the State of Delaware, which effected an increase in the Company’s authorized shares of common stock, from 1.2 billion to 1.7 billion, par value $0.001 per share. As a result of this increase in authorized shares, the liability-classified warrants were reclassified to equity. Approximate 141 million warrants to purchase shares of the Company’s common stock were classified as liabilities through January 8, 2023.
Previous report
Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions
Previous report
In June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The FASB is issuing this Update (1) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.
Previous report
For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. We will adopt ASU 2022-03 effective January 1, 2024. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements.
Previous report
We recognized a net loss of $62.6 million, $105.0 million and a net income of $179.1 million for the years ended December 31, 2023, 2022 and 2021, respectively. The net loss of $62.6 million and $105.0 million for the years ended December 31, 2023 and 2022 included a non-cash gain of $1.5 million and a non-cash loss of $25.8 million from change in fair value derivative liabilities and convertible notes, respectively. The net income of $179.1 million for the year ended December 31, 2021 included a non-cash gain of $239.3 million from change in fair value derivative liabilities.
Previous report
The R&D expenses in 2023 and 2022 primarily reflected extensive one-time activities (i) to accomplish a number of pre-requisites that are required before making an application for regulatory of DCVax-L, (ii) to prepare the application package and (iii) to prepare other materials, such as the Trial Master File, to be inspection-ready in addition to the application package. The pre-requisites and preparations included developing, submitting and obtaining regulatory approval for a Pediatric Investigation Plan (PIP), preparing and qualifying for manufacturing licenses required for the Sawston facility, completing the technology transfer from the London facility (where the Company had done all its manufacturing before 2022) to the Sawston facility to enable GMP manufacturing to begin in February 2022 at Sawston (while also continuing in the London facility), and six workstreams related to product matters involving Comparability, Stability, Potency, Product Profile, Mechanism of Action and Fill/Finish which are needed for the application package to seek regulatory approval of DCVax-L.
Previous report
The 2023 and 2022 R&D expenses we incurred for these activities included payments to numerous teams of specialized external consultants and the CRO, as well as to Advent BioServices. The majority of the payments to Advent were for one-time expenses for ten key one-time milestones for pre-requisites and preparations for the MAA application for product approval. These included three milestones for obtaining the three licenses required for the Sawston facility, six milestones for the six product workstreams, and 1 milestone related to preparing key portions of an application for regulatory approval of the DCVax-L product.
Previous report
During the year ended December 31, 2023, we completed the last three one-time milestones (obtaining a commercial manufacturing license from the MHRA, completion of drafting and submission of the application to MHRA for product approval), and recognized additional $1.5 million in research and development expense.
Previous report
During the year ended December 31, 2022, we paid $3.0 million for the cash component of seven milestones, and accrued $4.7 million for the cash component of future milestones. We issued 7.5 million shares at fair value of $5.9 million for the stock component of eight milestones, and we accrued $3.6 million for the stock component of future milestones.
Previous report
The decrease of $3.6 million in 2023 compared to 2022 was mainly related to a decrease of $1.6 million in consulting, legal and professional fees, a decrease of $0.7 million in compensation expenses and a $0.9 million reduction in our director and officer insurance expenses.
Previous report
Expenses incurred in 2022 and 2021 were consistent with rounding, but there was a slight decrease of approximate $46,000 which was mainly related to a decrease of $7.0 million stock-based compensation that represented the vesting of a portion of previously granted equity-based awards, and that was recognized in general and administrative expense, and offset by an increase of approximately $1.8 million related to legal and professional expenses, an increase of $1.5 million in insurance premiums, an increase of $1.6 million related
Previous report
to accrued but unpaid employees’ bonus for 2021 and 2022 performances and an increase of $1.7 million of travel and conference expenses.
Previous report
We elected the fair value option to fair value certain convertible notes under the guidance in ASC 825 during the year ended December 31, 2023 (see Note 7). We recognized a non-cash loss of $2.0 million change in fair value of the convertible notes during the year ended December 31, 2023.
Previous report
During the year ended December 31, 2023, we issued approximately 37.0 million shares of common stock with a fair value of $24.7 million to certain lenders in lieu of cash payments of $19.1 million of debt, including $1.8 million of accrued interest. We also extinguished Share liabilities of $1.1 million and recognized additional $0.8 million in Share liabilities. We recognized an approximately $5.3 million debt extinguishment loss during the year ended December 31, 2023 from the debt redemption.
Previous report
During the year ended December 31, 2023, we issued approximately 56,000 shares of Series C preferred stock with a fair value of $1.0 million to certain lenders in lieu of cash payments of $0.9 million in debt, including $0.1 million of accrued interest. We recognized an approximately $0.1 million debt extinguishment loss.
Previous report
During the year ended December 31, 2022, we recognized approximately $2.7 million net debt extinguishment loss. We issued approximately 18.1 million shares of common stock at fair value of $13.8 million to certain lenders in lieu of cash payment of $11.3 million debt, including $1.8 million accrued interest. We also extinguished approximately $0.2 million embedded derivative liability upon the conversion. We recognized approximately $2.3 million debt extinguishment loss. Additionally, pursuant to exchange agreements executed various holders, the Company is required to potentially issue additional common stock (the “Share liability”) if the stock price is less than the price defined in the exchange agreement as of the true-up date. We recognized additional $0.7 million debt extinguishment loss related to the Share liability during the year ended December 31, 2022. During the year ended December 31, 2022, we also issued approximately 0.2 million shares of Series C preferred stock at fair value of $3.5 million to certain lenders in lieu of cash payments of $3.4 million debt, including $0.4 million accrued interest. We recognized approximately $0.1 million debt extinguishment loss. We also recognized $0.4 million debt extinguishment gain from PPP loan forgiveness during the year ended December 31, 2022.
Previous report
During the year ended December 31, 2021, we entered into multiple note extension agreements whereby the maturity dates of the notes were extended for an additional 2-4 months. Certain amendments were accounted for as a debt extinguishment. We recognized $0.2 million debt extinguishment loss from the amendment.
Previous report
Inducement Expense
Previous report
During the year ended December 31, 2021, we recorded inducement expense of $0.6 million, which was related to certain warrants exercise.
Previous report
We received approximately $9.5 million and $4.1 million in cash proceeds from issuances of common stock and warrants, in both public and private offerings during the years ended December 31, 2022 and 2021, respectively.
Reworded paragraphs (26)
Previous wording
The following Management’s Discussion and Analysis provides a historical and prospective narrative on the Company’s financial condition, and results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The discussion of the Company’s financial condition and results of operations for the year ended December 31, 2022 compared to the same period in 2021 is included in Part II, Item 7. Below includes Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10–K for the year ended December 31, 2023.
Current wording
The following Management’s Discussion and Analysis provides a historical and prospective narrative on the Company’s financial condition, and results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Previous wording
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
Current wording
Level 1: Quoted prices in active markets for identical assets or liabilities.
Previous wording
●Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable
Current wording
Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.
Previous wording
We account for the issuance of common stock purchase warrants issued in connection with the equity offerings in accordance with the provisions of ASC 815, Derivatives and Hedging (“ASC 815”). We classify as equity any contracts that (i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). We account for certain common stock warrants outstanding as a liability at fair value and adjust the instruments to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our consolidated statements of operations. The fair value of the warrants issued by us has been estimated using Monte Carlo simulation and or a Black Scholes model. The warrant liabilities are valued using Level 3 valuation inputs.
Current wording
The Company accounts for the issuance of common stock purchase warrants issued in connection with the equity offerings in accordance with the provisions of ASC 815, Derivatives and Hedging (“ASC 815”). The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company accounts for certain common stock warrants outstanding as a liability at fair value and adjusts the instruments to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in its Consolidated Statements of Operations and Comprehensive Loss. The fair value of the warrants issued by the Company has been estimated using Monte Carlo simulation and or a Black Scholes model. The warrant liabilities are valued using Level 3 valuation inputs (see Note 4).
Previous wording
The Company has derivative financial instruments that are not hedges and do not qualify for hedge accounting. Changes in the fair value of these instruments are recorded in other income (expense), net in the Consolidated Statements of Operations and Comprehensive Loss.
Current wording
The Company has derivative financial instruments that are not hedges and do not qualify for hedge accounting. Changes in the fair value of these instruments are recorded in other income (expense), on a net basis in the Consolidated Statements of Operations and Comprehensive Loss.
Previous wording
The Company assesses its long-lived assets for impairment whenever facts and circumstances indicate that the carrying amounts may not be fully recoverable. To analyze recoverability, the Company projects undiscounted net future cash flows over the remaining lives of such assets. If these projected cash flows are less than the carrying amounts, an impairment loss would be recognized, resulting in a write-down of the assets with a corresponding charge to earnings. The impairment loss is measured based upon the difference between the carrying amounts and the fair values of the assets. Assets to be disposed of are reported at the lower of the carrying amounts or fair value less cost to sell. Management determines fair value using the discounted cash flow method or other accepted valuation techniques.
Current wording
of such assets. If these projected cash flows are less than the carrying amounts, an impairment loss would be recognized, resulting in a write-down of the assets with a corresponding charge to earnings. The impairment loss is measured based upon the difference between the carrying amounts and the fair values of the assets. Assets to be disposed of are reported at the lower of the carrying amounts or fair value less cost to sell. Management determines fair value using the discounted cash flow method or other accepted valuation techniques.
Previous wording
The Company adopted a sequencing policy under ASC 815-40-35 to determine if reclassification of contracts from equity to liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate if it has sufficient authorized shares. Certain contracts were classified as liabilities as the result of the instruments containing a potentially indeterminable number of shares and, most recently, due to the Company entering into agreements providing for the potential issuance of more shares than authorized. While temporary agreements are in place to keep the potential exercises beneath the number authorized, certain instruments are classified as liabilities, after allocating available authorized shares on the basis of the earliest grant date of potentially dilutive instruments. Pursuant to ASC 815, issuance of stock-based awards to the Company’s employees, non-employees or directors are not subject to the sequencing policy.
Current wording
The Company adopted a sequencing policy under ASC 815-40-35 whereby in the event that reclassification of contracts from equity to liabilities is necessary pursuant to ASC 815 due to (i) the Company’s inability to demonstrate it has sufficient authorized shares as result of certain financial instrument with a potentially indeterminable number of shares due to a variable conversion feature with no floor, or (ii) the company committing more shares than authorized, all future instruments may be classified as a derivative liability with the exception of instruments related to share-based compensation issued to employees or directors. While temporary suspensions are in place to keep the potential exercises beneath the number authorized, certain instruments are classified as liabilities, after allocating available authorized shares on the basis of the earliest maturity date of potentially dilutive instruments. Pursuant to ASC 815, issuance of stock-based awards to the Company’s employees, nonemployees or directors are not subject to the sequencing policy.
Previous wording
A change in the terms or conditions of a warrant is accounted for as a modification. For a warrant modification accounted for under ASC 815, the effect of a modification shall be measured as the difference between the fair value of the modified warrant over and the fair value of the original warrant immediately before its terms are modified, with each measured on the modification date. The accounting for any incremental fair value of the modified warrants over the original warrants is based on the specific facts and circumstances related to the modification. When a modification is directly attributable to an equity offering, the incremental change in fair value of the warrants is accounted for as an equity issuance cost. When a modification is directly attributable to a debt financing, the incremental change in fair value of the warrants is accounted for as a debt discount or debt issuance cost. For all other modifications, the incremental change in fair value is recognized as a deemed dividend.
Current wording
A change in the terms or conditions of a warrant is accounted for as a modification. For a warrant modification accounted for under ASC 815, the effect of a modification shall be measured as the difference between the fair value of the modified warrant and the fair value of the original warrant immediately before its terms are modified, with each measured on the modification date. The accounting for any incremental fair value of the modified warrants over the original warrants is based on the specific facts and circumstances related to the modification. When a modification is directly attributable to an equity offering, the incremental change in fair value of the warrants is accounted for as an equity issuance cost. When a modification is directly attributable to a debt financing, the incremental change in fair value of the warrants is accounted for as a debt discount or debt issuance cost. For all other modifications, the incremental change in fair value is recognized as a deemed dividend.
Previous wording
We account for certain convertible notes issued from August to October 2023 on an instrument-by-instrument basis under the fair value option (“FVO”) election of ASC Topic 825, Financial Instruments (“ASC 825”). The convertible notes accounted for under the FVO election are each debt host financial instruments containing embedded features wherein the entire financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. Changes in the estimated fair value of the convertible notes are recorded as a component of Other (expense) income in the consolidated statements of operations, except that the change in estimated fair value attributable to a change in the instrument-specific credit risks is recognized as a component of other comprehensive income. As a result of electing the FVO, issuance costs related to the convertible notes are expensed as incurred.
Current wording
The Company accounts for certain convertible notes issued from August to October 2023 on an instrument-by-instrument basis under the fair value option (“FVO”) election of ASC Topic 825, Financial Instruments (“ASC 825”). The convertible notes accounted for under the FVO election are each debt host financial instruments containing embedded features wherein the entire financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. Changes in the estimated fair value of the convertible notes are recorded as a component of Other (expense) income in the consolidated statements of operations, except that the change in estimated fair value attributable to a change in the instrument-specific credit risks is recognized as a component of other comprehensive income. As a result of electing the FVO, issuance costs related to the convertible notes are expensed as incurred.
Previous wording
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. We do not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
Current wording
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 does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
Previous wording
Net cash used in operations was $53.6 million, $52.8 million and $38.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Current wording
Net cash used in operations was $57.0 million and $53.6 million for the years ended December 31, 2024 and 2023, respectively.
Previous wording
For the years ended December 31, 2023, 2022 and 2021, research and development expense was $27.7 million, $35.5 million and $20.3 million, respectively. The increase in R&D in 2023 and 2022 as compared to 2021 was mainly reflected extensive one-time activities, which were started in mid of 2022 and fully completed as of December 31, 2023.
Current wording
For the years ended December 31, 2024 and 2023, research and development expense were $34.9 million and $27.7 million, respectively. The breakdown of this increase in R&D expenses in 2024 as compared to 2023 was primarily related to a net increase in expenses of approximately:
Previous wording
General and administrative expenses were $29.7 million, $33.4 million and $33.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Current wording
General and administrative expenses were $33.0 million and $29.7 million for the years ended December 31, 2024 and 2023, respectively.
Previous wording
We recognized a non - cash income of $3.6 million, a non - cash loss of $25.8 million and a non - cash gain of $239.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. The non - cash loss was primarily due to the increase of our stock price, and the non - cash gain was primarily due to the decrease of our stock price. Our closing stock prices as of December 31, 2023, 2022 and 2021 were as follows:
Current wording
We recognized a non - cash gain of $0.4 million and $3.6 million for the years ended December 31, 2024 and 2023, respectively. The gain was primarily due to the decrease of our closing stock price as of December 31, 2024 compared to December 31, 2023. The higher gain in 2023 was mainly due to the non-cash revaluation gain recognized as of January 9, 2023, when we reclassed all warrants from liability classified to equity classified. The stock price on January 9, 2023 and December 31, 2022 was $0.71 and $0.78 per share, respectively.
Previous wording
During the years ended December 31, 2023, 2022 and 2021, we recorded interest expense of $5.2 million, $6.1 million, and $5.0 million, respectively.
Current wording
During the years ended December 31, 2024 and 2023, we recorded interest expense of $7.8 million and $5.2 million, respectively. The increase in interest expense in 2024 was mainly related to an increase of outstanding debt balance.
Previous wording
During the years ended December 31, 2023, 2022, and 2021, we recognized foreign currency transaction income of $2.0 million, a loss of $3.3 million and a loss of $1.7 million, respectively. The gain was due to the weakening of the U.S. dollar relative to the British pound sterling. The loss was due to the strengthening of the U.S. dollar relative to the British pound sterling.
Current wording
During the years ended December 31, 2024 and 2023, we recognized foreign currency transaction loss of $1.5 million and a gain of $2.0 million, respectively. The loss was due to the strengthening of U.S. dollar relative to the British pound sterling and vice versa for the gain.
Previous wording
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 within one year after the 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.
Current wording
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
Previous wording
We used $53.6 million, $52.8 million and $38.3 million in cash for operating activities during the years ended December 31, 2023, 2022 and 2021, respectively. The increase in cash used in operating activities was primarily attributable to an increase in clinical trial related expenditures.
Current wording
We used $57.0 million and $53.6 million in cash for operating activities during the years ended December 31, 2024 and 2023, respectively. The increase in cash used in operating activities was primarily attributable to an increase in clinical trial related expenditures.
Previous wording
We spent approximately $3.4 million, $2.9 million and $6.0 million in cash for purchases of equipment in the UK and the build-out of our facility in Sawston, UK during the years ended December 31, 2023, 2022 and 2021, respectively.
Current wording
We spent approximately $1.0 million and $3.4 million in cash for purchases of equipment in the U.K. and the build-out of our facility in Sawston, U.K. during the years ended December 31, 2024 and 2023, respectively.
Previous wording
We received approximately $13.3 million and $18.7 million cash from issuances of 1.0 million and 1.2 million shares of Series C convertible preferred stock during the years ended December 31, 2023 and 2022, respectively.
Current wording
We received approximately $8.2 million and $13.3 million cash from issuances of 0.8 million and 1.0 million shares of Series C convertible preferred stock during the years ended December 31, 2024 and 2023, respectively.
Previous wording
We received approximately $1.7 million, $11.1 million and $20.0 million of cash proceeds from the exercise of warrants and options during the years ended December 31, 2023, 2022 and 2021, respectively.
Current wording
We received approximately $1.5 million and $1.7 million of cash proceeds from the exercise of warrants and options during the years ended December 31, 2024 and 2023, respectively.
Previous wording
We received approximately $20.0 million, $5.6 million and $29.7 million in cash proceeds from the issuance of multiple notes payable during the years ended December 31, 2023, 2022 and 2021, respectively.
Current wording
We received approximately $14.0 million and $20.0 million in cash proceeds from the issuance of multiple notes payable during the years ended December 31, 2024 and 2023, respectively.
Previous wording
We received approximately $13.3 million cash proceeds from issuance of convertible notes payable to individual lenders during the year ended December 31, 2023.
Current wording
We received approximately $20.0 million and $13.3 million cash proceeds from issuance of convertible notes payable to individual lenders during the year ended December 31, 2024 and 2023, respectively.
Previous wording
We received $5.0 million from issuance of non-dilutive funding agreements during the year ended December 31, 2023.
Current wording
We received $50,000 and $5.0 million from issuance of non-dilutive funding agreements during the year ended December 31, 2024 and 2023, respectively.
Previous wording
We made aggregate debt payments of $0.4 million, $5.5 million and $5.8 million during the years ended December 31, 2023, 2022 and 2021, respectively.
Current wording
We made aggregate debt payments of $1.4 million and $0.4 million during the years ended December 31, 2024 and 2023, respectively.
Previous wording
We made repayment of $0.2 million of investor advances during the years ended December 31, 2023.
Current wording
We made repayment of $0.2 million of investor advances during the year ended December 31, 2023.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The Company assesses its long-lived assets for impairment whenever facts and circumstances indicate that the carrying amounts may not be fully recoverable. To analyze recoverability, the Company projects undiscounted net future cash flows over the remaining lives
Current report — wording carried from elsewhere
to continue as a going concern within one year after the 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.