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By Ransdell Pierson

March 10 (Reuters) – German health regulators have granted

Northwest Biotherapeutics Inc special permission to

sell its experimental brain cancer drug, DCVax-L, in the

country, even though the small U.S. biotechnology company has

not yet completed its late-stage trial of the immunotherapy.

The special “hospital exemption” in Germany would allow

Northwest to sell DCVax-L for five years, and to seek renewed

approval afterward, Northwest Biotherapeutics Chief Executive

Officer Linda Powers said in an interview. The company has not

yet requested or received formal marketing approval for its

product.

The exemption allows Northwest to sell DCVax-L through

hospitals and their outpatient clinics to patients with all

severities of cancer that begin the brain, even though it is

only being tested in patients newly diagnosed with the most

severe form of the disease, called Glioblastoma multiforme

(GBM).

It is the first hospital exemption in Germany for a product

never previously on the market, Powers said. She hopes it will

encourage other European nations to look favorably on DCVax-L.

The European Union has encouraged member countries to create

the hospital exemptions as a way of fostering use of

breakthrough biotechnology drugs that have not yet won formal

marketing approval.

Patients taking DCVax-L in small informal trials, along with

standard care, lived 2.5 times as long as the typical patient

taking standard treatment alone.

Northwest Biotherapeutics’s fortunes are already being

closely watched on Wall Street, where company shares have surged

60 percent this year to the $6 range. The company has reported

promising results for the drug in a tiny cadre of patients, but

skeptics question whether they will be borne out in a larger

population.

Interim data from a late-stage trial had been expected last

month, but has not yet become available, causing concern among

investors. The company said on Friday that an independent data

safety monitoring board had recommended the trial continue,

based on its safety review.

The German regulator, known as the Paul-Ehrlich-Institute

(PEI), said DCVax-L can be used after patients receive the

standard care for brain cancer, which consists of surgery,

radiation and treatment with Merck & Co Inc’s Temodar

chemotherapy.

At least 3,000 cases of GBM are seen in Germany each year,

Powers estimated. She added that many other patients have lower-

grade brain tumors that will also be eligible for treatment with

DCVax-L.

Northwest Biotherapeutics plans to begin selling its drug in

the next few months in Germany, and to ramp up production at its

manufacturing plant in Leipzig, Powers said.

“IMPORTANT VALIDATION,” HIGH PRICE

“This is an important validation” of DCVax-L, said Powers,

who described the German regulator as among the toughest in

Europe. “They realize we’re still in our Phase III trial, but

appear satisfied with the underlying biology of DCVax-L and the

glimpses of effectiveness that were seen in early-stage trials.”

DCVax-L initially could be priced higher than Temodar, which

costs about $65,000 to $70,000 a year. Powers said a premium

price for DCVax-L was warranted because of signs of

effectiveness seen in the informal early-stage trials.

The regulator apparently opened the door to DCVax-L because

data from the small earlier trials suggested advantages over

standard treatments that offer little help to patients, Powers

said. Industry analysts say the treatment could potentially be

worth more than a billion dollars in annual sales if it

eventually wins full marketing approval in Europe and the United

States.

“When you add Temodar to surgery and radiation you get an

additional 2.5 months of survival,” Powers said, allowing the

average patient to survive 14.5 months.

By contrast, the average patient taking DCVax-L plus

standard treatment in the smaller Phase I/II trial survived

three years, without additional serious side effects. But data

from that study, which involved 20 patients with newly diagnosed

GBM, were not considered statistically significant because of

the small size and informal nature of the trial.

DCVax-L is among an emerging new crop of drugs that coax the

body’s own immune system to track down and kill cancer cells.

More specifically, it harnesses dendritic cells, or master cells

of the immune system that give marching orders to its soldiers,

including t-cells and b-cells, which make antibodies.

The treatment consists of an individual patient’s immature

dendritic cells being drawn from the blood and mingled in a

laboratory dish with dozens of antigens, or proteins, from brain

tumor tissue of the patient obtained in surgery.

When purified and injected back into the patient, DCVax-L is

meant to prompt t-cells and b-cells to leave the lymph nodes and

fan out through the body, seeking and attacking cells having the

target antigens.

(For a graphic, click: http://link.reuters.com/cex86v)

Northwest Biotherapeutics expects to report complete data

from its formal late-stage trial of DCVax-L in 2015, Powers

said. The Phase III study, which began in 2008 and is being

conducted in Europe and the United States, involves 312 patients

who were newly diagnosed with GBM and received standard

therapies.

“If we meet the goals of the trial, we would plan to apply

for marketing approval in Europe and the United States

simultaneously,” Powers said.

Separately, German’s centralized government reimbursement

authority has authorized Northwest Biotherapeutics to negotiate

reimbursement for DCVax-L, Powers said. She added that six major

hospital centers in Germany, anticipating the hospital

exemption, have applied to be eligible for reimbursement for the

product.

At least 12,000 patients a year develop GBM in the United

States, along with a similar number in Europe, Powers said.

Northwest Biotherapeutics is pushing ahead despite two

high-profile disappointments of dendritic cell-based therapies

from ImmunoCellular Therapeutics Ltd and Dendreon Corp

.

(Reporting by Ransdell Pierson; Editing by Jeffrey Benkoe)