Gazelle Hunting Meeting #3

Northwest Biotherapeutics, Inc (NWBO)

Product Portfolio: Customized Cancer Therapies
Jocelyn Bao, Product Analyst Hao Liu, Financial Analyst Yi (Shirley) Shen, Market Analyst Mark Verdecia, Scientific Advisor Haohan Xu, Team Leader

Agenda
Company Overview Financial Highlights Company Management Comparison of Treatment Valuation, Price, and Costs Germany Market Financial Forecast Investment Thesis Sensitivity Analysis Risk Factors (Supporting Slides) (Appendix: financial and valuation models)

Company Overview
Northwest Biotherapeutics., is a biotech company that aims at developing more effective vaccines to treat solid tumor cancers.

Headquartered in Bethesda, MD
Products:

DCVax-L, DCVax-Direct, DCVax-Prostate

Investment Thesis- BUY

Current market price: $6.07 as of 4/22/2014 Recommend to buy at $12 or lower Recommend to sell at $25 or higher

Financial Highlights
Market Cap: 326.19 M Shares outstanding: 53.74 M 52wk range: $3.10- $10.64 EPS: -2.00 Debt structure: No outstanding debt Funding: $36 M Additional funds available: $5.5 M grant from German government Monthly burn rate: $2.7 million

Company Management
Linda F Powers (CEO)

Harvard Law School, JD; Princeton, BA in economics

Holdings: $1.02 million/ 0.3% of NWBO (as of 4/11/2014)
Date 6/2011- Present 2001- Present Present Present Present Organization NWBO Toucan Capital Corp Toucan Partners Moffitt Technology Corp M2gen Title Chairman/CEO Managing Director Managing Member Board Member Board Member

Source: Morningstar, Business Week

Company Management
Dr. Alton Boynton

University of Iowa, PhD in Radiation Biology

Holdings: $50 million/ 5.8 % in stock, 7.6% in options of NWBO (as of 4/11/2014)

Date Present 1998- Present

Organization NWBO NWBO

Title Chief Scientific Officer Board Member

Source: Morningstar, Business Week

Comparison of Treatment
DCVax-L Avastin Standard Of Care (SOC) 14.6 months

Average Overall Survival (OS)

36 months

15.7 months

DCVax-L vs. Avastin

Both are biologics. Expensive technical expertise& high manufacturing costs
AVASTIN DCVAX-L

Produced in an engineered cell line.

Directly made from an individual patient.

Custom product, more manufacturing steps. IP is the manufacturing process. Cannot be scaled. Lessened patient burden.

Generic product, fewer manufacturing steps. IP is the engineered product. Economies of scale decrease COGS. Significant patient burden from treatment course.

Valuation-Price and Cost

Provenge
Technology Platform Immune/DC cells

DCVax-L
Immune/DC cells/Patient specific antigen

Cost of Production

Relatively lower

More extraction process, relatively higher

High More

Efficiency Dose

Relatively low Less

Pricing
Price $140,000 $120,000 $120,000 $93,000

$100,000
$80,000 $60,000 $40,000 $20,000 $-

Treatment Year 1: 7 doses Year 2: 3 doses Year 3: 1 dose

Revenue: front-loaded

Provenge

DCVax-L

Addressable Market
# of GBM patients under DCVax-L
Launch year 2016
35000

Population of EU in 2013
Population of US in 2013 Population of Germany in 2013 Annual GBM incidence

733 M

30000
25000 20,822 18,433 11,698 6,820

28,391 29,431 29,549 25,516

317 M

20000 15000

82 M

10000 5000

300 2014E

450

2/100,000

2015E

2016E

2017E

2018E

2019E

2020E

2021E

2022E

2023E

Market Penetration

From 10% to 50%

# of patients in EU

# of patients in US

# of patients in Germany

Milestones-DCVax-L
Event Early access program in Germany Enroll patients (outside of trial) in Germany Phase III results Approval and commercialization globally Date

03/2014
Q2 2014 2015 2016-2017

Source: Clinicaltrials.gov, Company press releases

Pre-approval in Germany
Approval Renewable 5 year exemption from the Paul Ehrlich Institute (FDA equivalent)

DCVax-L to patients with any type of glioma brain cancers

7,000 new cases/ year at full price Eligible for reimbursement from Sickness Funds
Source: Company Press Release

Germany Market
New patients enrollment 2014: 300, 2015: 450

Germany 50,000,000.0 45,000,000.0 40,000,000.0

35,000,000.0
30,000,000.0 25,000,000.0 Revenue Net Income

Partnership: 6 major hospitals

20,000,000.0 15,000,000.0 10,000,000.0 5,000,000.0 2014E 2015E

Source: Company Press Release

Financial Forecast
Revenue Projection (Worldwide) 1,400,000,000.0 1,200,000,000.0 1,000,000,000.0

800,000,000.0
Revenue 600,000,000.0 400,000,000.0 200,000,000.0 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E Net Income

Sensitivity Analysis

Risk Factors
Regulatory risks: product approval Operational risks: market penetration Financial risks: funding; cash outflow Third party risks: reimbursement from insurance companies Industry risks: Roche and Novartis

Q&A
Thank you! Any questions?

Reference
Summer Street Research Partners http://www.bizjournals.com/washington/news/2011/06/06/northwestbiotherapeutics.html Clinicaltrials.gov Crunchbase Morningstar Bloomberg Business week Company reports and news releases

Rationale
Discount rate
- VC hurdle rate: 30-50% - A Survey by 300+ biotech stakeholders 80% range: 12%-40% for Midstage P/E multiple - Based on the median and average.

Risks in biotech

Waxmans Impact on U.S. Drug Pricing: Hype or hard times ahead?

US Senate NO regulatory power over drugs Physicians expensive biotech drugs Generic manufacturers expensive drugs less competition

Financials- Assumption

Financials- Revenue and NI

Valuation- DCF