10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

OR

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to _______

Commission File Number: 001-35737

NORTHWEST BIOTHERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or Other Jurisdiction of Incorporation or Organization) 94-3306718  (I.R.S. Employer Identification No.)

 4800 Montgomery Lane, Suite 800, Bethesda, MD 20814

(Address of principal executive offices) (Zip Code)

(240) 497-9024

(Registrant's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company x
(do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No x

As of May 14, 2014, the total number of shares of common stock, par value $0.001 per share, outstanding was 57,195,817.

NORTHWEST BIOTHERAPEUTICS, INC.

FORM 10-Q

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Condensed Interim Financial Statements
	Condensed Consolidated Balance Sheets as of March 31, 2014 (unaudited) and December 31, 2013	2
	Condensed Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2014 and 2013 and the period from March 18, 1996 (inception) to March 31, 2014	3
	Condensed Consolidated Statements of Comprehensive Loss (unaudited) for the three months ended March 31, 2014 and 2013 and the period from March 18, 1996 (inception) to March 31, 2014	4
	Condensed Consolidated Statement of Stockholders’ Equity (Deficit) for the three months ended March 31, 2014 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2014 and 2013 and the period from March 18, 1996 (inception) to March 31, 2014	6-7
	Unaudited Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 4.	Controls and Procedures	18
PART II - OTHER INFORMATION
Item 5.	Other Information	19
Item 6. Exhibits		20
SIGNATURES		21

Part I – Financial Information

Item 1. Financial Statements

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company) 

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	March 31,			December 31,
	2014				2013
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	12,230		$	18,499
Prepaid expenses and other current assets		147			147
Total current assets		12,377			18,646
Property and equipment, net		80			83
Other non-current assets		55			55
Total assets	$	12,512		$	18,784
LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable (includes related party of $1,055 and $3,619 as of March 31, 2014 and December 31, 2013, respectively)	$	6,620		$	8,937
Accrued expenses (includes related party of $6 and $5 as of March 31, 2014 and December 31, 2013, respectively)		756			842
Convertible notes, net (includes related party of $50 and $50 as of March 31, 2014 and December 31, 2013, respectively)		238			288
Investor deposit		1,400			-
Notes payable - in dispute		934			934
Derivative liability associated with warrants		33,624			8,688
Total current liabilities		43,572			19,689
Redeemable common stock ($0.001 par value); 0 and 1,444,788 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively		-			8,913
Stockholders' equity (deficit):
Preferred stock ($0.001 par value); 40,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively		-			-
Common stock ($0.001 par value); 450,000,000 shares authorized; 54,818,410 and 45,666,315 shares issued and outstanding as of March 31, 2014 and December 31, 2013 , respectively		55			46
Additional paid-in capital		400,003			375,213
Deficit accumulated during the development stage		(430,928	)		(384,887	)
Cumulative translation adjustment		(190	)		(190	)
Total stockholders' equity (deficit)		(31,060	)		(9,818	)
Total liabilities, redeemable common stock and stockholders' equity (deficit)	$	12,512		$	18,784

See accompanying notes to the unaudited condensed consolidated financial statements 

2

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share data)

							Period from
	For the three months						March 18, 1996
	ended March 31,						(Inception)  to
	2014			2013			March 31, 2014
Revenues:
Research material sales	$	-		$	-		$	580
Contract research and development from related parties		-			-			1,128
Research grants and other		-			137			2,642
Total revenues		-			137			4,350
Operating costs and expenses:
Cost of research material sales		-			-			382
Research and development		19,986			11,608			183,064
General and administration		3,693			2,470			107,056
Depreciation and amortization		3			3			2,392
Loss on facility sublease		-			-			895
Asset impairment loss		-			-			2,445
Total operating costs and expenses		23,682			14,081			296,234
Loss from operations		(23,682	)		(13,944	)		(291,884	)
Other income (expense):
Valuation of reclassified equity instruments		-			-			16,071
Inducement expense		(5,251	)		-			(43,187	)
Accretion of redeemable securities		-			-			(2,073	)
Change in fair value of derivatives		(16,984	)		-			(14,444	)
Gain on sale of intellectual property and property and equipment		-			-			3,664
Foreign exchange gain or loss		(2	)		-			(3	)
Interest expense		(122	)		(450	)		(55,970	)
Interest income and other		-			-			1,707
Net loss	$	(46,041	)	$	(14,394	)	$	(386,119	)
Issuance of common stock in connection with elimination of Series A and Series A-1  preferred stock preferences		-			-			(12,349	)
Modification of Series A preferred stock warrants		-			-			(2,306	)
Modification of Series A-1 preferred stock warrants		-			-			(16,393	)
Series A preferred stock dividends		-			-			(334	)
Series A-1 preferred stock dividends		-			-			(917	)
Warrants issued on Series A and Series A-1 preferred stock dividends		-			-			(4,664	)
Accretion of Series A preferred stock mandatory redemption obligation		-			-			(1,872	)
Series A preferred stock redemption fee		-			-			(1,700	)
Beneficial conversion feature of Series D preferred stock		-			-			(4,274	)
Net loss applicable to common stockholders	$	(46,041	)	$	(14,394	)	$	(430,928	)
Net loss per share applicable to common stockholders - basic	$	(0.88	)	$	(0.54	)
Weighted average shares used in computing basic loss per share		52,377			26,710

See accompanying notes to the unaudited condensed consolidated financial statements 

3

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(in thousands)

							Period from
							March 18, 1996
	For the three months ended						(Inception)
	March 31,						to March 31,
	2014			2013			2014
Net loss	$	(46,041	)	$	(14,394	)	$	(386,119	)
Other comprehensive loss
Foreign currency translation adjustment		-			-			(190	)
Total comprehensive loss	$	(46,041	)	$	(14,394	)	$	(386,309	)

See accompanying notes to the unaudited condensed consolidated financial statements

4

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

(in thousands)

	Common Stock				Additional Paid-			Accumulated			Cumulative Translation			Total stockholders'
	Shares		Amount		in Capital			Deficit			adjustment			equity (deficit)
Balance December 31, 2013		45,666	$	46		375,213		$	(384,887	)	$	(190	)	$	(9,818	)
Issuance of common stock in exchange for services		5,340		5		4,022			-			-			4,027
Issuance of common stock for cash		32		-		224			-			-			224
Conversion of accounts payable to common stock and warrants		1,482		2		8,725			-			-			8,727
Conversion of note payable and accrued interest to common stock		70		-		217			-			-			217
Proceeds from warrants exercises		722		1		2,691			-			-			2,692
Cashless warrants exercises		41		-		-			-			-			-
Redemption of redeemable securities		1,445		1		8,912			-			-			8,913
Adjustment for issuance of common stock in 2012		20		-		-			-			-			-
Offering costs		-		-		(1	)		-			-			(1	)
Net loss		-		-		-			(46,041	)		-			(46,041	)
Balance as of March 31. 2014		54,818	$	55		400,003		$	(430,928	)	$	(190	)	$	(31,060	)

See accompanying notes to the unaudited condensed consolidated financial statements

5

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands) 

							Period from
	For the three months ended March 31,						March 18, 1996 (Inception) to
	2014			2013			March 31, 2014
Cash Flows from Operating Activities:
Net Loss	$	(46,041	)	$	(14,394	)	$	(386,119	)
Reconciliation of net loss to net cash used in operating activities:								-
Depreciation and amortization		3			3			2,391
Amortization of deferred financing costs		-			-			320
Amortization of debt discount and accretion on redeemable securities		-			368			44,776
Change in fair value of derivatives		16,984			-			14,444
Accrued interest converted to common stock		76			-			336
Accreted interest on convertible promissory note		-			-			1,484
Stock-based compensation costs		-			609			24,412
Stock and warrants issued for services		9,528			883			35,823
Inducement expense		5,251			-			35,234
Valuation of reclassified equity contracts		-			-			(16,070	)
Asset impairment loss and gain on sale of properties		-			-			(936	)
Loss on facility sublease		-			-			895
Increase (decrease) in cash resulting from changes in assets and liabilities:
Prepaid expenses and other current assets		-			73			563
Accounts payable and accrued expenses		277			299			8,766
Related party accounts payable and accrued expenses		3,363			5,085			45,261
Deposits and other non-current assets		-			-			(39	)
Accrued loss on sublease		-			-			(265	)
Deferred rent		-			-			411
Net Cash used in Operating Activities		(10,559	)		(7,074	)		(188,314	)
Cash Flows from Investing Activities:
Purchase of property and equipment, net		-			-			(5,123	)
Proceeds from sale of property and equipment		-			-			258
Proceeds from sale of intellectual property		-			-			1,816
Proceeds from sale of marketable securities		-			-			2,000
Refund of security deposit		-			-			(3	)
Transfer of restricted cash		-			-			(1,035	)
Net Cash used in Investing Activities		-			-			(2,087	)
Cash Flows from Financing Activities:
Proceeds from issuance of redeemable securities		-			-			5,302
Repayment on redeemable securities		-			-			(240	)
Proceeds from Investor deposit		1,400			-			1,400
Proceeds from issuance of notes payable		-			400			7,980
Valuation of reclassified equity contracts
Proceeds from issuance of convertible notes payable		-			-			38,414
Proceeds from issuance of notes payable to related parties		-			-			12,880
Repayment of note payable to related parties		-			-			(9,655	)
Repayment of convertible promissory note		(25	)		-			(3,786	)
Borrowing under line of credit, Northwest Hospital		-			-			2,834
Repayment of line of credit, Northwest Hospital		-			-			(2,834	)
Payment on capital lease obligations		-			-			(323	)
Payments on note payable		-			(289	)		(420	)
Proceeds from issuance preferred stock, net		-			-			28,708
Proceeds from exercise of stock options and warrants		2,692			-			3,515
Proceeds from issuance common stock and warrants, net		224			-			126,182
Proceeds from sale of stock warrant		-			-			90
Payment of preferred stock dividends		-			-			(1,251	)
Series A preferred stock redemption fee		-			-			(1,700	)
Deferred financing costs		(1	)		(10	)		(4,275	)
Net Cash provided by Financing Activities		4,290			101			202,821
Effect of exchange rates on cash and cash equivalents		-			-			(190	)
Net increase (decrease) in cash and cash equivalents		(6,269	)		(6,973	)		12,230
Cash and cash equivalents at beginning of period		18,499			7,346			-
Cash and cash equivalent at end of period	$	12,230		$	373		$	12,230

See accompanying notes to the unaudited condensed consolidated financial statements

6

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	For the three months ended March 31,				Period from March 18, 1996 (Inception) to
	2014		2013		March 31, 2014
Supplemental disclosure of cash flow information - Cash paid during the period for interest	$	-	$	-	$	1,879
Supplemental schedule of non-cash financing activities:
Equipment acquired through capital leases		-		-		285
Issuance of common stock in connection with elimination of Series A and Series A-1 preferred stock preferences		-		-		12,349
Issuance of common stock in connection with conversion of notes payable and accrued expenses		140		-		62,192
Issuance of common stock and warrants in connection with conversion of accounts payable		5,926		-		22,894
Issuance of redeemable common stock in connection with conversion of liabilities		-		934		3,673
Warrants issued on Series A and Series A-1 preferred stock dividends		-		-		4,664
Reclass of redeemable security to equity		8,913		-		10,777
Reclass of warrants to warrant liability		-		-		217
Warrant liability recorded in connection with issuance of common stock		-		-		5,602
Liability for reclassified equity contracts		-				41,253
Accretion of mandatorily redeemable Series A preferred stock redemption obligation		-		-		1,872
Debt discount on promissory notes		-				27,414
Issuance of Series C preferred stock warrants in connection with lease agreement		-		-		43
Issuance of common stock to settle accounts payable		-		-		4
Liability for and issuance of common stock and warrants to Medarex		-		-		840
Issuance of common stock to landlord		-		-		35
Deferred compensation on issuance of stock options and restricted stock grants		-		-		759
Cancellation of options and restricted stock		-		-		849
Financing of prepaid insurance through note payable		-		-		491
Stock subscription receivable		-		-		480
Modification of Series A preferred stock warrants		-		-		2,306
Modification of Series A-1 preferred stock warrants		-		-		16,393
Conversion of convertible promissory notes and accrued interest to Series A-1 preferred stock		-		-		7,707
Conversion of convertible promissory notes and accrued interest to Series D preferred stock		-		-		5,324
Conversion of debt to accounts payable		-				1,428
Conversion of convertible promissory notes and accrued interest to stock		-		-		269

See accompanying notes to the unaudited condensed consolidated financial statements 

7

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Organization and Description of Business and Recent Developments

Northwest Biotherapeutics, Inc. and its wholly owned subsidiaries NW Bio Europe S.A.R.L and NW Bio Gmbh (collectively, the “Company”, “we”, “us” and “our”) were organized to discover and develop innovative immunotherapies for cancer.

The Company’s platform technology, DCVax, is currently being tested for the treatment of certain types of cancers through clinical trials in the United States and Europe that are in various phases. The Company is considered to be a development stage company and, as such, the Company’s financial statements are prepared in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915 “Development Stage Entities.” The Company is subject to all of the risks and uncertainties associated with development stage biotech companies.

Recent Developments

On January 17, 2014, the Company entered into the following agreements (collectively, the “Cognate Agreements” or the “Agreements”) with Cognate BioServices, Inc. (“Cognate”) for manufacturing and related services for our DCVax® products:

· a DCVax®-L Manufacturing and Services Agreement;

· a DCVax®-Direct Manufacturing and Services Agreement;

· an Ancillary Services Agreement; and

  a Manufacturing Expansion Services Agreement.

Together, these Agreements provide for substantial expansion of the manufacturing capacity for the Company’s programs, in multiple regions, as well as development of the necessary systems and logistics, and other near-term and long-term preparations, for large scale scale-up of the Company’s programs. These Agreements include most favored nation treatment with respect to the terms provided to any other investors or creditors (including with respect to any warrants).

The Company also entered into a Lock-Up Agreement with Cognate on January 17, 2014, under which Cognate agreed to have all of the shares that are issued as part of the milestone and initiation payments and the invoice conversions under the Cognate Agreements (collectively, the “Lock-Up Shares”) locked up for up to 36 months, in return for 15% warrant coverage for each 6-month period of lock-up, on the same terms as the warrants in the Cognate Agreements. During the lock-up, the Lock-Up Shares may not be sold or traded on the market. These lock-up terms are subject to the same most favored nation treatment as provided in the Cognate Agreements as described above.

2. Liquidity and Financial Condition

The Company used approximately $10.6 million of cash in its operating activities for the three months ended March 31, 2014 and has used $188.3 million of cash in its operating activities since inception. The Company incurred a $46.0 million aggregate combined cash and non-cash loss for the three months ended March 31, 2014, including $35.4 million of net aggregate non-cash charges associated with stock based compensation, a mark to market charge for the change in the fair value of its derivative liability, and inducement expenses related to the exchange of Cognate BioServices, Inc. (“Cognate”) accounts payable for common stock and warrants.

The Company had cash and cash equivalents of $12.2 million as of March 31, 2014, and current assets less accounts payable and accrued expenses and notes payable of approximately $3.8 million at March 31, 2014. The Company owes an aggregate of $1.1 million of trade liabilities and convertible notes to related parties.

On April 9, 2014, the Company entered into a Securities Purchase Agreement with a single institutional investor for the sale of 2,272,727 shares of common stock at a purchase price of $6.60 per share, for a total purchase price of $15.0 million. Additionally, from the date of the closing until one year after the closing date, the investor has a non-transferable Overallotment Right to purchase up to 2,272,727 additional shares of common stock at a price per share of $7.50, for an additional subscription amount of up to $17.05 million. See Note 11.

8

Because of recurring operating losses, net operating cash flow deficits, and a deficit accumulated during the development stage, there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

3. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated.

The accompanying unaudited condensed financial statements as of March 31, 2014 and for the three months then ended have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements. The condensed consolidated balance sheet as of March 31, 2014, condensed consolidated statements of operations and condensed consolidated statements of comprehensive loss for the three months ended March 31, 2014 and 2013, condensed consolidated statement of stockholders’ equity (deficit) for the three months ended March 31, 2014, and the condensed consolidated statements of cash flows for the three months ended March 31, 2014 and 2013 and period from March 18, 1996 (inception) to March 31, 2014 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for the three months ended March 31, 2014 are not necessarily indicative of results to be expected for the year ending December 31, 2014 or for any future interim period. The condensed balance sheet at December 31, 2013 has been derived from audited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2013, and notes thereto included in the Company’s annual report on Form 10-K, which was filed with the SEC on April 1, 2014.

Use of Estimates

In preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include valuing equity securities in share-based payment arrangements, estimating the fair value of equity instruments recorded as derivative liabilities, and estimating the useful lives of depreciable assets and whether impairment charges may apply.

Research and Development Costs

Research and development costs are charged to operations as incurred and consist primarily of clinical trial costs, related party manufacturing cost, consulting costs, contract research and development costs, and compensation costs. For the three months ended March 31, 2014 and 2013 the Company recognized $20.0 million and $11.6 million, respectively, of research and development costs (cash and non-cash combined).

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2013 Annual Report.

9

4. Fair Value Measurements

The following table classifies the Company’s liabilities measured at fair value on a recurring basis (primarily reflecting an increase in stock price per share) into the fair value as of March 31, 2014 and December 31, 2013 (in thousands):

	Fair value measured at March 31, 2014
	Total carrying		Quoted prices in active			Significant other	Significant
	value at March 31,		markets			observable inputs	unobservable inputs
	2014		(Level 1)			(Level 2)	(Level 3)
Warrant liability	$	33,624	$	-	$	-	$	33,624

	Fair value measured at December 31, 2013
		Total carrying		Quoted prices in active		Significant other		Significant
		value at December 31,		markets		observable inputs		unobservable inputs
		2013		(Level 1)		(Level 2)		(Level 3)
Warrant liability	$	8,688	$	-	$	-	$	8,688

There were no transfers between Level 1, 2 or 3 during the three months ended March 31, 2014.

The following table presents changes in Level 3 liabilities measured at fair value from the period ended December 31, 2013 through March 31, 2014. Both observable and unobservable inputs are used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category  include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs.

10

Balance – December 31, 2013	$	8,688
3,174,833 warrants issued during 1st quarter		7,952
Change in fair value of warrant liability		16,984
Balance – March 31, 2014	$	33,624

The Company’s warrant liabilities are measured at fair value using the Monte Carlo simulation valuation methodology. A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities that are categorized within Level 3 of the fair value hierarchy for the three months ended March 31, 2014 is as follows (dollars and shares in thousands):

Warrants issuance date	January 6, 2014		January 17, 2014		January 31, 2014		February 3, 2014		February 28, 2014		March 31, 2014		Total
Number of warrants issued		139		2,434		143		119		195		145		3,175
Fair value of warrants at issuance date	$	308	$	5,501	$	383	$	327	$	844	$	589	$	7,952

Date of valuation	January 6, 2014			January 17, 2014			January 31, 2014			February 3, 2014			February 28, 2014			March 31, 2014
Dividend yield (per share)		0	%		0	%		0	%		0	%		0	%		0	%
Strike price	$	4.00		$	4.00		$	4.00		$	4.00		$	4.00			$2.40 - $6.00
Volatility (annual)		92.13	%		93.12	%		96.72	%		91.79	%		105.03	%		74.43%-88.03	%
Risk-free rate		1.73	%		1.66	%		1.55	%		1.49	%		1.49	%		1.73	%
Expected life (years)		5.0			5.0			5.00			5.00			5.00			4.33-4.85

The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s Management.

5. Stock-based Compensation

Stock Based Compensation to Non-employees

Stock-based compensation expense related to stock-based awards to non-employees is recognized as the stock-based awards are earned, generally through the provision of services. The Company believes that the fair value of the stock-based awards is more reliably measurable than the fair value of the services received. The fair value of the granted stock-based awards is calculated at each reporting date. On January 17, 2014, in connection with the Cognate Agreements, the Company issued 5,101,366 shares of common stock. The common stock will vest over thirty six months from the closing date. Stock-based compensation expense related to non-employee grants was $2.5 million for the three months ended March 31, 2014 and is anticipated to be a similar amount for each calendar quarter over the next three years.

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6. Notes Payable

During the three months ended March 31, 2014, the Company converted notes and relevant accrued interest of $0.1 million into approximately 0.07 million shares of common stock. During the three months ended March 31, 2013, $0.9 million of notes were converted into 0.4 million shares of common stock.

Notes payable consist of the following at March 31, 2014 and December 31, 2013 (in thousands):

	March 31,		December 31,
	2014		2013
Notes payable - current
12% unsecured orginally due July 2011 - in dispute (1)		934		934
		934		934
Convertible notes payable, net - current
6% unsecured (2)		135		160
8% unsecured note due 2014 (3)		53		53
		188		213
Convertible Notes payable related party, net - current
6% due on demand (4)		50		75
		50		75
Total notes payable, net	$	1,172	$	1,222

(1) This $0.934 million note, which was originally due in July 2011 is currently under dispute with the creditor as to the validity of the note payable balance, which the Company believes has already been paid in full and is not outstanding.

(2) This $0.135 million note as of March 31, 2014 consists of two separate 6% notes in the amounts of $0.110 million and $0.025 million. In regard to the $0.110 million note, the Company has made ongoing attempts to locate the creditor to repay or convert this note, but has been unable to locate the creditor to date. In regard to the $0.025 million note, the holder has elected to convert these notes into equity, the Company has delivered the applicable conversion documents to the holder, and the Company is waiting for the holder to execute and return the documents.

(3) This $0.530 million note is due May 25, 2014.

(4) This $0.050 million demand note as of March 31, 2014 is held by an officer of the Company. The holder has made no demand for payment, and is not expected to make a demand any time in the near term.

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7. Net Loss Per Share Applicable to Common Stockholders

Options, warrants, and convertible debt outstanding were all considered anti-dilutive for the three months ended March 31, 2014, and 2013, due to net losses.

The following securities were not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented (in thousands): 

	For the three months ended
	March 31,
	2014		2013
Common stock options		1,551		1,551
Common stock warrants		22,640		12,214
Convertible notes		81		102
Excluded potentially dilutive securities		24,272		13,867

8. Related Party Transactions

a. Cognate BioServices

Under the January 17, 2014 DCVax®-L Manufacturing Services Agreement and the DCVax-Direct Agreement, a modified set of provisions applies going forward to any shut down or suspension.  Such shut down provisions have been included in all of the agreements with Cognate since 2005. Under the modified provisions, if the Company shuts down or suspends its DCVax-L program or DCVax-Direct program with Cognate in breach of the Agreement, the Company will be liable for certain fees in addition to any other remedies. The fees are based on the stage at which the shut down or suspension occurs:

• Prior to the last dose of the last patient enrolled in the Phase III trial for DCVax®-L or after the last dose of the last patient enrolled in the Phase III clinical trial for DCVax®-L but before any submission for product approval in any jurisdiction or after the submission of any application for market authorization but prior to receiving a marketing authorization approval: in any of these cases, the fee shall be $3 million.

• At any time after receiving the equivalent of a marketing authorization for DCVax®-L in any jurisdiction, the fee shall be $5 million.

For the three months ended March 31, 2014 the Company recognized approximately $10.1 million was associated with one-time charges (including charges relating to start-up and substantial expansion of several Company programs) under the 2014 service agreements. In addition, the Company incurred recurring research and development charges, which, for the three months ended March 31, 2014 were $5.5 million. As of March 31, 2014 and December 31, 2013, the Company owed Cognate (including third party sub-contract amounts) approximately $1.0 million and $3.6 million, respectively.

Cognate Accounts Payable Conversions and inducement charge –First quarter 2014

Under the July 2013 Conversion and Lock-up Agreement $5.9 million in accounts payable due to Cognate was converted into common stock and warrants. 1.5 million shares of common stock were issued based on a $4.00 per share conversion price. 50% warrant coverage of the common stock issued resulted in 0.7 million warrants issued with an initial exercise price of $4.00. The shares and warrants are subject to most favored nation treatment with respect to the terms provided to any other investors or creditors subsequent to their issuance (including with respect to any warrants).

In accordance with ASC Topic 820, the fair value of the shares was recognized as approximately $8.7 million. The fair value of the warrants was based on the Monte Carlo simulation model, the inputs of which are disclosed in note 4 and was approximately $2.5 million. The Company recorded a $5.3 million of inducement expense in connection with these transactions.

The conversion shares are subject to a lock-up period of at least 18 months from the date of their issuance. Under the lock-up, the shares cannot be sold or traded on the market.

The Company classified the warrants as liabilities at their fair value and adjusts the instruments to fair value at each reporting period in the condensed consolidated statements of operations.

9. Redeemable Common Stock

During the first quarter of 2014, the redemption provision on all 1.4 million redeemable shares outstanding as of December 31, 2013 lapsed and $8.9 million was transferred from redeemable common stock to stockholders’ equity (deficit). 

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10. Stockholders’ Deficit

a. Common Stock Issuances

First Quarter 2014

During the quarter ended March 31, 2014 the Company issued in aggregate 5,339,862 shares of common stock in exchange for consulting services. In accordance with ASC Topic 718, the fair value of the vested portion of the common stock was recognized as $4.0 million.

During the quarter ended March 31, 2014 the Company issued in aggregate 32,000 shares of common stock for cash. The fair value of the common stock recognized was $0.2 million.

During the quarter ended March 31, 2014, the Company converted accounts payable due to Cognate of approximately $5.9 million into 1,481,644 shares. The Company recorded $2.8 million of inducement expense associated with the issuance of the common shares. In addition, as noted in footnote 10b the Company issued warrants that were valued at $2.5 million at the date of issuance related to the conversion of accounts payable. Total inducement charge was $5.3 million.

During the quarter ended March 31, 2014, the Company converted notes and relevant accrued interest, based upon the original terms, of $0.2 million into approximately 0.07 million shares of common stock.

During the quarter ended March 31, 2014, the Company issued an aggregate of 721,827 shares of common stock from the exercise of warrants previously issued. The Company received proceeds of approximately $2.7 million from the exercise of these warrants.

During the quarter ended March 31, 2014, 1,444,788 redeemable shares with a carrying value of $8.9 million were no longer redeemable and were reclassed to stockholders’ equity.

b. Stock Purchase Warrants

The following is a summary of warrant activity for the three months ended March 31, 2014 (in thousands):

	Number of			Weighted Average
	Warrants			Exercise Price
Outstanding as of December 31, 2013		20,266		$	5.23
Warrants issued in connection with conversion of Cognate accounts payable*		741			4.00
Warrants issued in exchange for services		2,434			4.00
Warrants exercised on a cashless basis		(73	)		-
Warrants exercised for cash		(722	)		3.66
Expired in first quarter of 2014		(6	)		9.54
Outstanding as of March 31, 2014		22,640		$	5.12

*The warrants contain “down round protection” and the Company classifies these warrant instruments as liabilities at fair value and remeasures these instruments to fair value each reporting period. The Company recorded a $2.5 million charge to inducement expense related to these warrants. The fair value of the warrants was based upon a Monte Carlo Simulation as more fully discussed in Note 4.

11.  Subsequent Events

Securities Purchase Agreement - $15.0 million in procceds

On April 15, 2014, the Company sold to a single institutional investor 2,272,727 shares of common stock at a purchase price of $6.60 per share, for a total purchase price of $15.0 million. Additionally, from the date of the closing until one year after the closing date, the investor has a non-transferable Overallotment Right to purchase up to 2,272,727 additional shares of common stock at a price per share of $7.50, for an additional subscription amount of up to $17.05 million. In connection with the sale, the Company paid H.C. Wainwright, the sole placement agent in the offering, fees of approximately $1.05 million, and issued to H.C. Wainwright a warrant to purchase 113,636 shares, which was equal to 5% of the shares sold to the investor in the financing, with an exercise price of $8.25 (which is equal to 125% of the price per share for the shares sold to the investor).

If the investor exercises any portion of the Overallotment Right, the Company will issue to H.C. Wainwright a warrant to purchase shares in an amount equal to 5% of the shares purchased by the investor, with an exercise price of $9.375 (equal to 125% of the price per share for the Overallotment Right shares, if any). The warrants will be exercisable until February 5, 2018.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those statements included with this report. In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words “believe,” “expect,” “intend,” “anticipate,” and similar expressions are used to identify forward-looking statements, but some forward-looking statements are expressed differently. Many factors could affect our actual results, including those factors described under “Risk Factors” in our Form 10-K for the year ended December 31, 2013. These factors, among others, could cause results to differ materially from those presently anticipated by us. You should not place undue reliance on these forward-looking statements.

Overview

We are a development stage biotechnology company focused on developing immunotherapy products to treat cancers more effectively than current treatments, without toxicities of the kind associated with chemotherapies, and, through a proprietary batch manufacturing process, on a cost-effective affordable basis initially in both the United States and Europe.

We have developed a platform technology, DCVax, which uses activated dendritic cells to mobilize a patient's own immune system to attack their cancer. The DCVax technology is expected to be applicable to all solid tumor cancers, and is embodied in several distinct product lines. One of the product lines (DCVax-L) is designed to cover all solid tumor cancers in which the tumors can be surgically removed. Another product line (DCVax-Direct) is designed for all solid tumor cancers which are considered inoperable and cannot be surgically removed. We believe the broad applicability of DCVax to many cancers provides multiple opportunities for commercialization and partnering.

Our DCVax platform technology involves dendritic cells, the master cells of the immune system, and is designed to reinvigorate and educate the immune system to attack cancers. The dendritic cells are able to mobilize the overall immune system, including T cells, B cells and antibodies, natural killer cells and many others. Such mobilization of the overall immune system provides a broader attack on the cancer than mobilizing just a particular component, such as T cells alone, or a particular antibody alone. Likewise, our DCVax technology is designed to attack the full set of biomarkers, or antigens on a patient’s cancer, rather than just a particular selected target or several targets. Clinical experience indicates that when just one or a few biomarkers on a cancer are targeted by a drug or other treatment, sooner or later the cancer usually develops a way around that drug, and the drug stops working. We believe that mobilizing all agents of the immune system, and targeting all biomarkers on the patient’s cancer, contributes to the effectiveness of DCVax.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses.

On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and stock-based compensation. We based our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses that are not readily apparent from other sources. Actual results may differ from these estimates.

Our critical accounting policies and significant estimates are detailed in our Annual Report on Form 10-K for the year ended December 31, 2013. Our critical accounting policies and significant estimates have not changed substantially from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

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Results of Operations

Operating costs:

Operating costs and expenses consist primarily of research and development expenses, including clinical trial expenses which increase when we are actively participating in clinical trials and are especially high when we are in a large ongoing international phase III trial (as we now are) and when we also have an additional clinical trial program under way in parallel (as we have with our 60-patient Phase I/II trial with DCVax-Direct for all types of inoperable solid tumors), and general and administrative expenses.

Our operating costs include ongoing development work relating to the DCVax-Direct product and its manufacturing, such as the design, engineering, sourcing, production, testing, modification and validation of the manufacturing automation equipment, disposable sets to be used with the manufacturing automation equipment, manufacturing processes, product ingredients, product release assays, and other matters, as well as development of standard operating procedures (SOPs), batch production records, and other necessary materials.

Our operating costs also include the costs of preparations for the launch of new or expanded clinical trial programs including the Phase III trial in the UK and Germany (with DCVax-L for brain cancer) and the Phase I/II trial (with DCVax-Direct for all inoperable solid tumor cancers). The preparation costs include upfront payments to the clinical trial sites and the CROs managing the trials and other service providers, and expenses related to institutional approvals, training of medical and other site personnel, trial supplies and other.

Research and development:

Discovery and preclinical research and development expenses include costs for both internal and substantial external scientific personnel, technical and regulatory advisers, and others, costs of laboratory supplies used in our internal research and development projects, travel, regulatory compliance, and expenditures for preclinical and clinical trial operation and management when we are actively engaged in clinical trials.

Because we are a development stage company, we do not allocate research and development costs on a project basis. We adopted this policy, in part, due to the unreasonable cost burden associated with accounting at such a level of detail and our limited number of financial and personnel resources.

General and administrative:

General and administrative expenses include administrative personnel related salary and benefit expenses, cost of facilities, insurance, travel, legal support, property and equipment and amortization of stock options and warrants.

Three Months Ended March 31, 2014 and 2013

We recognized a net loss of $10.6 million in cash outlays and $35.4 million in non-cash accounting charges (i.e. increase in stock-based compensation, inducement expense and the issuance of warrants etc.), for a combined (cash and non-cash) total net loss of $46.0 million for the three months ended March 31, 2014 compared to a net loss of $14.4 million for the three months ended March 31, 2013.

Research and Development Expense. Research and development expense was a combined (cash and non-cash) total of $20.0 million for the three months ended March 31, 2014 compared to $11.6 million for the three months ended March 31, 2013. The increase was primarily attributable to the DCVax-Direct manufacturing and product development work and the preparation costs for the launch of two clinical trial programs, one in the US and one in the UK, as well as expansion of the ongoing Phase III trial in the US, and increased manufacturing of DCVax®-L for the Phase III trial.

As of March 31, 2014 we had over 51 clinical trial sites in operation in the US and UK in our Phase III trial with DCVax-L, compared to approximately 40 clinical trial sites in the US only at March 31, 2013. At March 31, 2014, we also had substantially expanded other clinical trial related operations compared with March 31, 2013 including, for example, extensive preparations and launch of the Phase III DCVax-L clinical trial in the UK as described above, and launch of the Phase I/II DCVax-Direct trial in the US as described above, in addition to costs related to fully operational and approved manufacturing in Germany, cost of an established wholly owned German subsidiary, manufacturing activity in the UK and preparations in regard to nearly 30 clinical trial sites in the UK and Germany.

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General and Administrative Expense. General and administrative expense included $2.2 million of cash expenses, and $1.5 of non-cash charges (i.e. amortization of previously issued stock based compensation and restricted stock and warrants issued for services), for a combined cash and non-cash total of $3.7 million for the three months ended March 31, 2014 compared to $2.5 million for the three months ended March 31, 2013. The increase in general and administrative expenses from the prior period is as a result of increase in consulting expenses of $1.4 million and increase in legal expenses of $0.4 million due to the expansion of our platform, offset by a $0.6 million decrease in stock based compensation expense.

Change in fair value of derivatives. During the three months ended March 31, 2014 and March 31, 2013 we recognized a non-cash loss on derivative liabilities of $17.0 million and $0 million, respectively, due primarily to the change in value of the warrants issued to Cognate in connection with the extinguishment of accounts payable.   

Inducement expense. During the three months ended March 31, 2014 and March 31, 2013 we recognized an inducement expense of $5.3 million and $0 million, respectively. This inducement expense during the three months ended March 31, 2014 was related to the conversion of accounts payable to common stock and warrants to Cognate in connection with the extinguishment of accounts payable.   

Interest (Expense). Interest expense (including non-cash elements such as amortization of debt discount) decreased to $0.1 million for the three months ended March 31, 2014 from $0.5 million for the three months ended March 31, 2013. The decrease in interest expense is primarily related to the retirement of $1.8 million in notes payable during 2013.

Liquidity and Capital Resources

We have experienced recurring losses from operations. Net cash outflows from operations were $10.6 million for the three months ended March 31, 2014.

At March 31, 2014, current assets totaled $12.4 million, compared to $18.6 million at December 31, 2013. Working capital excluding the warrant liability was of $2.4 million at March 31, 2014, compared to a deficit of $1.0 million at December 31, 2013 (excluding redeemable common stock amounting to $8.9 million). The working capital deficit decrease as of March 31, 2014 as compared to December 31, 2013 is primarily related to the conversion of $5.9 million of accounts payable to Cognate to common stock and warrants.

On a going forward basis, commencing with August 2013, and continuing throughout the lock-up period (up to 36 months), we and Cognate agreed to establish an arrangement for regular ongoing payment of at least half of all invoices in common stock of our company, and the remainder in cash, at $4.00 per share subject to a most favored nation treatment with respect to terms provided to other investors or creditors (including with respect to any warrants). The arrangement will continue for 18 months from the execution of the Cognate agreements or until terminated by mutual agreement. The contracts implementing these agreements are the Cognate Agreements that were executed in January 2014.

Since 2004, Toucan Capital Fund II, L.P. (“Toucan Capital”), Toucan Partners LLC (“Toucan Partners”), entities controlled by Ms. Linda Powers, our CEO and the managing director of Toucan Capital and managing member of Toucan Partners, and Ms. Linda Powers (collectively “Toucan”) have provided substantial funding to us. From 2004 to date, Toucan has provided ongoing financings to us through the purchase of common stock, preferred stock (which was all converted to common stock), loans and debt securities. Toucan (other than Cognate) held approximately 8% of common stock outstanding as of March 31, 2014.

Operating Activities

We used $10.6 million in cash for operating activities during the three months ended March 31, 2014, and used $7.1 million in cash for operating activities during the three months ended March 31, 2013. The increase in cash used in operating activities was primarily attributable to the DCVax-Direct manufacturing and product development work, the preparations for launch of the Phase I/II clinical trial with DCVax-Direct for solid tumor cancers, the increased manufacturing of DCVax®-L for the ongoing Phase III brain cancer trial at a growing number of sites across the US and the preparation costs for the launch of the 60-patient Phase I/II trial with DCVax-Direct in the U.S., and the Phase III trial with DC-Vax-L for brain cancer in the UK.

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As of March 31, 2014, we had over 51 clinical trial sites in operation in the US and UK in our Phase III trial with DCVax-L, compared to approximately 40 clinical trial sites at March 31, 2013, in the US only. At March 31, 2014, we also had substantially expanded other clinical trial related operations compared with March 31, 2013 including, for example, the launch of the Phase III DCVax-L clinical trial in the UK and approval for the trial in Germany, and launch of the Phase I/II DCVax-Direct trial in the U.S in addition to costs related to fully operational and approved manufacturing in Germany, an established wholly owned German subsidiary, clinical activity in the U.K. and preparations for up to 30 clinical trial sites in the U.K. and Germany.

Financing Activities

During the three months ended March 31, 2014, our financing activities primarily consisted of proceeds from an investor of $1.4 million, such shares have not been issued yet as of May 14, 2014, $2.7 million from the exercise of warrants and $0.2 million for the issuance of common stock with warrants; partially offset by the payment of $0.03 million of convertible promissory notes.

In order to continue with our current activities under our DCVax®-L and DCVax-Direct program, we will have to obtain substantial amounts of further funding, as described in the Risk Factors section in our annual report on Form 10-K for the year ended December 31, 2013. Our on-going funding requirements will depend on many factors, including the results of the reimbursement negotiations in Germany, the implementation of our Hospital Exemption approval in Germany, and the extent to which we realize and draw upon various sources of non-dilutive funding. One such source of non-dilutive funding is a $5.5 million German grant awarded on May 1, 2012, by the German government through its Saxony Development Bank.  The grant will provide funding on a matching basis for up to 50% of the costs incurred by us for the DCVax-L clinical trial and manufacturing in Germany. We anticipate beginning to draw upon the grant in the next several months.

Other factors affecting our ongoing funding requirements include the number of staff we employ, the number of sites and pace of patient enrollment in our Phase III brain cancer trial and our Phase I/II clinical trial with DCVax-Direct, the costs of further development work relating to DCVax-Direct, the costs of expansion of manufacturing of both DCVax-L and DCVax-Direct, the cost of establishing clinical studies and compassionate use/named patient programs in other countries, and unanticipated developments. The extent of resources available to us will determine the pace at which we can move forward with both our DCVax-L program and our DCVax-Direct program.

As we are dependent on our ability to obtain short term financing and ultimately to generate sufficient cash flow to meet our obligations on a timely basis, as well as successfully obtain financing on favorable terms to fund our long term plans, our financial statements indicate there is substantial doubt about our ability to continue as a going concern.  We can give no assurance that our plans and efforts to achieve the above steps will be successful.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive, financial and accounting officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended.  Based on this evaluation, our principal executive, financial and accounting officer concluded that as of the end of the period covered by this report, in light of certain material weaknesses in our internal control over financial reporting described in our annual report on Form 10-K for the year ended December 31, 2013, our disclosure controls and procedures were not effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our chief executive officer, financial and accounting officer, to allow timely decisions regarding required disclosure, and that such information is recorded, processed, summarized and reported within the time periods prescribed by the SEC.

Based on management's evaluation as of December 31, 2013, our management identified the material weaknesses set forth below in our internal control over financial reporting:

(i) The Company's process for internally reporting material information in a systematic manner to allow for timely filing of material information is ineffective, due to its inherent limitations from being a small company, and there exist material weaknesses in internal control over financial reporting that contribute to the weaknesses in our disclosure controls and procedures.  These weaknesses include:

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• insufficient segregation of duties and oversight of work performed in our finance and accounting function due to limited personnel; and

• lack of controls in place to ensure that all material transactions and developments impacting the financial statements are reflected.

Our Company's management concluded that in light of the material weaknesses described above, our Company did not maintain effective internal control over financial reporting as of March 31, 2014 based on the criteria set forth in Internal Control—Integrated Framework—1992 issued by the COSO.

Changes in Internal Control over Financial Reporting

There has been no change in our internal controls over financial reporting that occurred during the fiscal quarter ended March 31, 2014, that has materially affected, or is reasonably expected to materially affect, our internal controls over financial reporting.

Part II - Other Information

Item 5. Other Information

none 

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Item 6. Exhibits

10.40*	DCVax®-L Manufacturing and Services Agreement, dated January 17, 2014, by and between    Northwest Biotherapeutics, Inc. and Cognate BioServices, Inc.
10.41*	DCVax®-Direct Manufacturing and Services Agreement, dated January 17, 2014, by and between Northwest Biotherapeutics, Inc. and Cognate BioServices, Inc.
10.42*	Ancillary Services Agreement, dated January 17, 2014, by and between Northwest Biotherapeutics, Inc. and Cognate BioServices, Inc.
10.43*	Manufacturing Expansion Services Agreement, dated January 17, 2014, by and between Northwest Biotherapeutics, Inc. and Cognate BioServices, Inc.

31.1	Certification of President (Principal Executive Officer and Principal Financial and Accounting Officer), Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of President, Chief Executive Officer and Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Confidential treatment has been requested with respect to portions of this exhibit. Those portions have been omitted and filed separately with the SEC.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NORTHWEST BIOTHERAPEUTICS, INC
Dated: May 15, 2014	By:	/s/ Linda M. Powers
		Name:	Linda M. Powers
		Title:	President and Chief Executive Officer
			Principal Executive Officer
			Principal Financial and Accounting Officer

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EX-10.40

Exhibit 10.40

*Portions of this exhibit marked [*] are requested to be treated confidentially.

DCVAX®-L MANUFACTURING AND SERVICES AGREEMENT

This Amended and Restated Services Agreement (this “Agreement”), originally dated April 1, 2011 is entered into, effective as of January 17, 2014 (the “Effective Date”), by and between Cognate BioServices, a Delaware corporation (Cognate”), and Northwest Biotherapeutics, a Delaware corporation (“NW Bio”).

RECITALS

WHEREAS, NW Bio is in the business of developing immune cell therapies for cancer, and Cognate is in the business of manufacturing clinical grade cellular products on a contract services basis;

WHEREAS, NW Bio and Cognate previously entered into a Services Agreement for the production of NW Bio’s DCVax® Products by Cognate (the “Prior Services Agreement”) and a Conversion and Lock-Up Agreement (the “Lock-Up Agreement”);

WHEREAS, Cognate has dedicated cGMP facilities and other facilities to NW Bio programs, and conducted all of NW Bio’s physical operations including all collections of patient tumor tissues and leukapheresis materials from clinical sites, all manufacturing, quality control, cryopreservation and banking of all DCVax® products, and all distribution and logistics to the point of care throughout the US, [*].

WHEREAS, both the quantity and the scope of services NW Bio has requested Cognate to provide greatly exceed the maximum amounts contemplated or provided for in the Prior Services Agreement, and the parties have jointly determined that the Prior Services Agreement needs to be amended accordingly, and certain services beyond the core manufacturing services need to be covered in separate agreements;

WHEREAS, Cognate has delivered, and will continue to deliver during the Term of this Agreement, its invoices to NW Bio on a current monthly basis for the services and facilities for NW Bio’s programs (collectively, the “Manufacturing Bills”);

[*]

WHEREAS, the parties desire to provide incentivized compensation in consideration of entering into series of amended and new Services Agreements to cover the increased amount of contract manufacturing and the wider range and increased amounts of related services by Cognate for the manufacture, distribution and handling of DCVax®-L Products for clinical trials and for subsequent commercialization; and

[*] Confidential treatment required; certain information omitted and filed separately with the SEC.

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WHEREAS, the parties also desire to update and reformulate their existing Services Agreement into a more comprehensive and complete set of four agreements consisting of (i) this DCVax-L Manufacturing and Services Agreement, (ii) a new DCVax-Direct Manufacturing and Services Agreement, (iii) a new Ancilliary Services Agreement, and (iv) a new Manufacturing Expansion Services Agreement;

WHEREAS, the parties also desire to update their existing Quality Agreement associated with the manufacture of DCVax®-L and ensure that the new or amended Services Agreements meet the requirements set forth in such Quality Agreement.

AGREEMENT

Now, Therefore, in consideration of the foregoing recitals and the mutual promises, representations, warranties, and covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

SECTION 1:    SERVICES

Cognate will provide to NW Bio, on the terms and conditions set forth herein, Manufacturing Services as provided in Section 1.1. The Manufacturing Services may be referred to herein as the “Services.” Under separate agreements, Cognate will also provide Ancillary Services and Manufacturing Expansion Services as provided in Section 1.2.

1.1    Manufacturing Services

1.1.1    Scope of Manufacturing Services.

(A.) In the U.S., Cognate will provide Manufacturing Services for the production of DCVax®-L products for various cancers, including brain cancer (the “DCVax®-L Product(s)”). Such Manufacturing Services, together with related Ancillary Services, will comprise the services necessary for the production and release of the DCVax®-L Products for administration to human patients [*]. The Manufacturing Services do not include any services after product release at Cognate’s cGMP manufacturing facility and delivery by Cognate to the shipping company.

(B.) Outside the U.S., under the Prior Services Agreement Cognate has been providing extensive and ongoing technology transfer, technical support and general management and oversight of third party providers and manufacturers, and the services required by NW Bio have been growing and expanding substantially. Following the Effective Date of this Agreement, such services relating to third parties will be provided under the separate agreements for Ancillary Services. [*]

[*] Confidential treatment required; certain information omitted and filed separately with the SEC.

2

1.1.2    Manufacturing Services Capacity.    Cognate will commit to providing the necessary facilities and personnel for production of DCVax®-L Products for such number of Product Lots as is equal to the Maximum Product Lots for which NW Bio pays Facilities Capacity Payments and Product and Supplies Fees pursuant to Section 2 hereof. If NW Bio requests production of DCVax®-L Products in excess of the Maximum Product Lots, Cognate will use commercially reasonable efforts to accomplish such excess production as requested, provided that NW Bio pays for such services in accordance with Section 2 hereof.

1.1.3    Regulatory Standards. The Manufacturing Services will be carried out in accordance with current Good Manufacturing Practices (“cGMP”) requirements established by the U.S. Food and Drug Administration (“FDA”), or the equivalent requirements established by the applicable regulators outside the U.S.

1.2    Additional Agreements

Certain additional services relating to the DCVax-L program will be provided at NW Bio’s request under separate agreements. These include an Ancillary Services Agreement and a Manufacturing Expansion Services Agreement. The Ancillary Services will include shipping distribution and logistics services; cryopreservation and storage services; clinical support services; development and validation services; recordkeeping services, and others. The Manufacturing Expansion Services will include oversight, management and support of third party manufacturing outside the U.S., [*].

1.3    Quality Agreement

Under the prior Services Agreement, the parties had entered into a Quality Agreement establishing the quality standards to be met in DCVax®-L Products, the requirements for product release, the respective roles and responsibilities of NWBO and Cognate in these processes, the standards and procedures for the handling of any deviations from the usual quality standards or product release requirements, and/or any complaints, the processes and allocation of responsibilities for reporting of these matters, and related subjects. Within one hundred eighty (180) days after the Effective Date of this Agreement, the parties will update the existing Quality Agreement consistent with the terms of this Agreement. Such updated Quality Agreement will be attached hereto as Exhibit A and incorporated herein by reference.

SECTION 2:    PAYMENTS

2.1    Payments for Manufacturing Services in the U.S.

2.1.1    Facilities Capacity Payments.

For regular ongoing costs associated with facilities and equipment to be used in NW Bio programs, NW Bio will pay a monthly Facilities Capacity Payment. Such monthly payment does not include start-up costs, shut down costs, capital expenditures or other non-recurring costs (which are expected to be covered in the separate Manufacturing Expansion Services Agreement). The amount of the monthly Facilities Capacity Payment will be determined in relation to the capacity to provide for a specified number of Product Lots as follows, and will escalate with a consumer price index jointly selected by the parties:

[*] Confidential treatment required; certain information omitted and filed separately with the SEC.

3

[*]

2.1.2 Fixed Fees for Manufacturing Services and Supplies; Minimum Commitments.

(A.) For each Product Lot in the U.S. for which DCVax®-L Product is to be made, Cognate will undertake the Manufacturing Services as provided in Section 1. NW Bio will pay Cognate a fixed fee per Product Lot for the product costs as part of the Manufacturing Services relating to that Product Lot (the “Product Fee”). The Product Fee will initially be as follows, and will escalate with a consumer price index jointly selected by the parties.

[*]

(B.) In addition, NW Bio will pay a fixed fee per Product Lot for materials and consumables (including reagents and other) used in the Manufacturing Services for that Product Lot (the “Supplies Fee”). The amount of such Supplies Fee will be as follows, and will escalate with the consumer price index jointly selected by the parties.

[*]

(C.) The Manufacturing Services do not include any repetition of some or all of the manufacturing processes [*] except as expressly provided for and paid for, nor any additional processing beyond the standard processing, [*].

(D.) Cognate will hire, train and maintain sufficient technical staff for the manufacture of such volume of DCVax®-L products as specified in the Minimum Commitment below (or such higher volume as NW Bio may request and may be jointly agreed), and for ongoing regulatory compliance for such volume of DCVax®-L products.

(E.) Notwithstanding anything to the contrary, NW Bio hereby commits to a minimum volume of DCVax®-L Products (the “Minimum Commitment”) equal to [*].

(F.) [*]

2.1.3 Start-up, Change, Reduction and/or Shut-down Costs, Capital Expenditures:

For each program and/or facility that NW Bio desires to start up, expand, upgrade, change, reduce or shut down, Cognate will prepare budgets for the capital expenditures required. NW Bio will review and approve the applicable budgets for the capital expenditures involved in each such program or site start-up, expansion, upgrade, change, reduction or shut-down. NW Bio will pay the budgeted capital expenditures [*].

[*] Confidential treatment required; certain information omitted and filed separately with the SEC.

4

During the Term of this Agreement, if NWBO for any reason shuts down, suspends or incurs substantial delay in the DCVax®-L program in whole or in part, the following shutdown, suspension or delay fees shall apply to cover costs associated with such a shutdown or suspension. [*].

[*].

2.1.4 Expansion Planning and Implementation Costs:

Until the Manufacturing Expansion Services Agreement is executed between the parties, for each program and/or facility that NW Bio desires to expand, upgrade or change, Cognate will prepare budgets for the costs involved and the capital expenditures required. NW Bio will review and approve the applicable budgets for the costs and the capital expenditures involved in each such expansion. NW Bio will pay the budgeted costs and capital expenditures.

2.2 Payment for Manufacturing, and/or Supervisory Services Outside the U.S.

[*] Such services will be covered under a separate Agreement as needed, but in the absence of such a separate Agreement, the parties agree that such Services will be paid on market terms proportional in the applicable country market to the terms under to this Agreement, adjusted for the higher costs of such manufacturing services being performed [*].

2.3    Reimbursement of Travel Costs

In addition to the payments for various services and expenses provided in this Section 2, NW Bio will reimburse all travel-related costs incurred by Cognate in performing any services hereunder. Such reimbursements will include appropriate per diem travel cost payments, to be jointly agreed by the parties in connection with each set of services, and reimbursement of all travel-related costs not covered by agreed per diem payments.

2.4    [*]

[*]

2.5    Credit Terms and Collection Costs

If NW Bio does not make a payment or reimbursement when due, the outstanding unpaid amounts will accrue interest at a default interest rate of one and one-half percent (1-1/2%) per month. If any collection action is undertaken to collect unpaid amounts, NW Bio will pay all fees and costs associated with such collection actions including, without limitation, reasonable attorneys’ fees, as incurred.

[*] Confidential treatment required; certain information omitted and filed separately with the SEC.

5

2.6    Yearly Adjustment

All payment amounts referenced in this Agreement shall be subject to a yearly increase of three percent (3%). The first increase shall be effective on the first invoice after the 12 month anniversary of this Agreement.

2.7    Milestone and Initiation Payments

The disinterested members of the Board of Directors of NW Bio agree that the magnitude of the undertakings now being asked of Cognate, particularly in view of the extraordinary performance by Cognate to date, and the scale and scope of services needed, which far exceeds the parties’ expectations when the Prior Agreement was entered into, requires a substantial initiation payment in connection with the major expansion of the DCVax-L program needed by NW Bio (the “Initiation Payment”). The disinterested Members of the Board agree that the excess services and accelerated timelines are of great value to NW Bio. [*] NW Bio will also make milestone payments to Cognate upon the achievement of mutually agreed operational milestones, such as [*].

2.8    Other Payment Terms

2.8.1 Payment of Manufacturing Bills Pursuant to Work Performed Under the Terms of this Agreement: Payment of Manufacturing Bills will be due within fifteen (15) after the invoice date. In the event that NW Bio fails to pay any Manufacturing Bills within fifteen (15) days after the invoice date, then commencing thirty (30) days after the invoice date and continuing until paid in full by cash and/or stock, the overdue amount will bear default interest at the rate of one and one-half percent (1-1/2%) per month. At least half of all Manufacturing Bills during the first eighteen (18) months following the Effective Date of this Agreement (the “Conversion Period”) will be paid in shares of NW Bio common stock, with the remaining portions of such Manufacturing Bills paid in cash. [*]. The conversion price for any conversions after the Conversion Period will be jointly determined by the parties, based upon market factors. With respect to any shares of NW Bio stock to be issued hereunder, Cognate may elect to receive unregistered shares immediately (with registration rights as provided herein) or to receive registered shares on the earliest date that any registered shares are issued to any other investors after the date of the Manufacturing Bill being converted [*].

2.8.2 Most Favored Nation Conversion Terms: Notwithstanding anything to the contrary herein, or in any other document or source, any amounts owed that are paid by NW Bio in shares, warrants and/or other securities of any kind (such as restricted stock units, convertible debt securities or other) issued or issuable in connection with this Agreement (including any subsequent amendments hereof) , will be subject to adjustment on a most favored nation basis relative to the terms provided or applied to any other investor or creditor of NW Bio during the Term of this Agreement or the Lock-Up Agreement, so that the terms of all shares, warrants and other securities issued or issuable under this Agreement will have terms no less favorable to Cognate than the terms of any shares, warrants and/or other securities issued or issuable to any other investor or creditor during the Term of this Agreement or the Lock-Up Agreement. For the avoidance of doubt, the application of most favored nation treatment will include not only the price and terms of securities issued but also the addition of, and terms relating to, additional securities, and additional rights and/or benefits to the investor or creditor (including warrants, rights of first refusal, pre-emptive rights, and/or other securities, rights or benefits). Such most favored nation adjustments may be implemented at any time or times after being times after being triggered by terms provided to other investors or creditors, and may be triggered on multiple occasions with respect to a particular security issued hereunder.

[*] Confidential treatment required; certain information omitted and filed separately with the SEC.

6

SECTION 3:    CONFIDENTIALITY

In connection with this Agreement, the parties will maintain a mutual Confidentiality Agreement.

SECTION 4:    REPRESENTATIONS AND WARRANTIES

4.1    Agreement Duly Authorized; Valid and Binding Obligations

Cognate and NW Bio each hereby represents and warrants, severally and not jointly, that:

4.2.1    Such party is a corporation or entity duly organized, validly existing and in good standing under the laws of the jurisdiction where such party is domiciled, and has all necessary power and authority to (i) own, operate and occupy its properties and to carry on its business as presently conducted and (ii) enter into this Agreement and the other agreements, instruments and documents contemplated hereby, and to consummate the transactions contemplated hereby and thereby. Such party is qualified to do business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect.

4.2    All necessary corporate or other proceedings, votes, resolutions, consents, waivers and approvals relating to the sale and purchase of shares have been completed by the applicable party. Upon execution, this Agreement will constitute a valid and legally binding obligation of the party, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

4.2    Valid Issuances; No Violation

NW Bio hereby represents and warrants that:

7

Upon issuance hereunder, each conversion share will be validly issued, fully paid and non-assessable. The execution, delivery, performance, issuance, sale and delivery of this Agreement and compliance with the provisions hereof by NW Bio will not (a) violate any provision of NW Bio’s certificate of incorporation or bylaws or, to the knowledge of the NW Bio, any law, statute, rule or regulation applicable to or NW Bio any order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable to NW Bio or any of its assets or (b) conflict with or result in material breach of any of the terms or conditions of any agreement or instrument to which NW Bio is a party, or given rise to any right of termination, cancellation or acceleration under any such agreement or instrument, or result in the creation of any lien or other encumbrance upon any of the material assets of NW Bio.

4.3    No Warranties of Merchantability or Fitness

EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, COGNATE MAKES NO WARRANTIES OR REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, WITH RESPECT TO ANY DCVAX®-L PRODUCTS OR ANY SERVICES RENDERED HEREUNDER, OR ANY TECHNOLOGY THAT MAY BE USED IN SUCH SERVICES OR INCORPORATED INTO SUCH DCVAX®-L PRODUCTS.

SECTION 5:    INSURANCE, INDEMNIFICATION, LIABILITY

5.1    NW Bio Insurance Obligations

NW Bio is required to obtain and to maintain throughout the term of this Agreement, in such amounts as are reasonably acceptable to Cognate, (a) clinical trial insurance covering all clinical trials of DCVax®-L Products, (b) all-risks umbrella insurance, (c) product liability insurance covering the distribution, use and administration of DCVax®-L Products to patients, and (d) such other insurance as is reasonable or customary in the industry. Cognate shall be a named insured and beneficiary on all such insurance coverages.

5.2    Cognate Insurance Obligations

Cognate is required to obtain and to maintain throughout the term of this Agreement, in such amounts as are reasonably acceptable to NW Bio, (a) product liability insurance covering the manufacture of DCVax®-L Products by Cognate, and (b) such other insurance as is reasonable or customary in the industry. NW Bio shall be a named insured and beneficiary on all such insurance coverages.

8

5.3    Indemnification

In addition to all rights and remedies available to Cognate at law or in equity, NW Bio will indemnify and hold harmless Cognate and its successors, assigns, affiliates and their respective present and former directors, officers, partners, employees, agents, representatives, shareholders, successors and assigns (each an "Indemnified Party") to the fullest extent permitted by law from and against all costs, expenses, losses, claims, damages, liabilities, [*] (a) arising from or relating to this Agreement and/or any transactions or services contemplated hereunder, (b) arising from or relating to any changes from the original agreement of the parties as described herein, or arising from or relating to a delayed agreement, or arising from or relating to delayed payment, delayed conversions and/or delayed issuances hereunder beyond the applicable Manufacturing Bill dates or other applicable reference dates, and (c) arising from or relating to any use or administration to patients of DCVax®-L Products manufactured by Cognate, provided that Cognate has manufactured such DCVax® Products substantially in accordance with the applicable specifications or SOPs for such DCVax®-L Products and/or with commercially reasonable deviation from such SOPs. NW Bio will pay all fees and expenses (including reasonable attorneys’ fees), as incurred, which are incurred by or on behalf of an Indemnified Party, or to which an Indemnified Party may become subject, in connection with any matters covered by this indemnification and/or in connection with investigating, preparing, pursuing, defending and resolving any threatened or pending claim, action, proceeding or investigation (collectively, “Proceedings") arising therefrom, whether or not such Indemnified Party is a formal party to such Proceedings.

5.4    No Consequential Damages

Notwithstanding anything to the contrary, in no event shall either party shall be liable hereunder, on any basis, for any indirect or consequential damages.

SECTION 6:    TERM AND TERMINATION

6.1    Term

This Agreement will remain in force until the later of seven (7) years from the Effective Date (the “Term”) or five (5) years after the first commercial sales of DCVax®-L Products pursuant to a Biologics License Application or marketing authorization (not a compassionate use, hospital exemption or similar authorization), unless terminated earlier pursuant to Section 6.2.

6.2    Termination

Either party may terminate this Agreement in the event of a material breach by the other party which remains uncured after notice of such breach for a period of thirty (30) days in the case of a monetary breach, or a period of one hundred twenty (120) days in the case of a non-monetary breach that is material to the contract taken as a whole.

[*] Confidential treatment required; certain information omitted and filed separately with the SEC.

9

SECTION 7:    REGISTRATION

7.1.    Unregistered Shares.

For any conversion shares issued hereunder which are unregistered under the Securities Act of 1933, as amended (the “Securities Act”) at the time of issuance, the certificates evidencing such unregistered conversion shares may, if necessary, bear the following legend (or a substantially similar legend) and such other legends as may be required by applicable laws:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR UNLESS SUCH TRANSACTION IS IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS.”

7.2    Registration.

Cognate will be entitled to “piggyback” registration rights, with respect to all unregistered conversion shares issued hereunder and all other shares and securities of NW Bio owned by Cognate and its affiliates, in any registrations effected by NW Bio until all such shares and securities have been registered. NW Bio will use commercially reasonable efforts to complete registration of such unregistered conversion shares by the earlier of six (6) months after the Effective Date of this Agreement or six (6) months after issuance during the Term of this Agreement.

7.3    Registration Costs.

NW Bio will bear all costs and expenses (including attorneys’ fees) relating to the preparation and filing of all registrations which NW Bio is required to undertake pursuant to this Agreement. 

SECTION 8:    MISCELLANEOUS

8.1    Governing Law

This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law.

10

8.2    Entire Agreement

This Agreement (including the Exhibits hereto), constitutes the entire agreement of the parties with respect to the subject matter hereof, and supersedes all prior agreements, understandings, promises or undertakings with respect to the subject matter hereof, including the prior Services Agreement, provided however, that the provision in the Prior Services Agreement (and the agreement prior to that) for a penalty payment of $2 million from NW Bio to Cognate, to which Cognate was entitled in connection with failure by NW Bio to complete enrollment in NW Bio’s Glioblastoma multiforme clinical trial by a specified date, survives and remains applicable, and has not been and is not waived, and provided further that this Agreement is part of a package of agreements which also a DCVax®-Direct Services Agreement and multiple Ancillary Services agreements (including a Distribution, Software and Specialty Services Agreement, a Manufacturing Expansion and Support Agreement and related agreements).

8.3    Amendments

Except as otherwise expressly provided herein, this Agreement may not be amended except by a written instrument signed by both parties hereto.

8.4    Adjustments for Stock Splits and Similar Transactions

In the event of a stock split, reverse split or other similar transaction during the Term of this Agreement, the prices and other numbers herein will be adjusted accordingly.

8.5    Survival

The provisions of Sections 2 - 5 herein will survive the expiration or termination of this Agreement until expiration of the applicable statute of limitations.

8.6    Notices

Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to be effective upon delivery when delivered (a) personally; (b) by facsimile or email, provided a copy is mailed no later than the next business day through a nationally recognized overnight delivery service; or (c) by overnight delivery through a nationally recognized overnight delivery service, in each case properly addressed to the receiving party at such address or facsimile number as the receiving party has furnished to the sending party in writing.

8.7    Severability

If one or more provisions of this Agreement are held to be unenforceable under applicable law, then such provision shall be excluded from this Agreement, the balance of the Agreement shall be enforceable in accordance with its terms, and the parties shall negotiate in good faith to amend or add to the provisions of this Agreement to effectuate as nearly as reasonably practicable, and as nearly as permitted under applicable law, the original intent of the parties with respect to the provision excluded.

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8.8    Successors and Assigns

Except as otherwise expressly provided herein, the provisions hereof will be binding upon, and inure to the benefit of the respective successors, assigns, heirs, executors and administrators of the parties hereto. Neither party hereto may transfer all or any portion of its rights under this Agreement to a third party other than an affiliate without the prior written consent of the other party hereto.

8.9    Interpretations

All pronouns and any variations thereof will be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons or entity or entities may require. All references to “$” or dollars herein will be construed to refer to United States dollars. The titles of the Sections and subsections of this Agreement are for convenience or reference only and are not to be considered in construing this Agreement. All references to “including” shall be deemed to mean “including, without limitation.”

8.10    Counterparts

This Agreement may be executed in counterparts, each of which when so executed and delivered will constitute a complete and original instrument but all of which together will constitute one and the same agreement, and it will not be necessary when making proof of this Agreement or any counterpart thereof to account for any counterpart other than the counterpart of the party against whom enforcement is sought.

12

[signatures on the following page]

13

IN WITNESS WHEREOF, the parties have executed this Services Agreement effective as of the date first set forth above.

NORTHWEST	COGNATE BIOSERVICES, INC.
BIOTHERAPEUTICS, INC.
By:	By:
Name:	Name:

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EX-10.41

Exhibit 10.41

*Portions of this exhibit marked [*] are requested to be treated confidentially.

DCVAX-DIRECT MANUFACTURING AND SERVICES AGREEMENT

This Services Agreement (this “Agreement”) is entered into, effective as of January 17, 2014(the “Effective Date”), by and between Cognate BioServices, a Delaware corporation (Cognate”), and Northwest Biotherapeutics, a Delaware corporation (“NW Bio”).

RECITALS

WHEREAS, NW Bio is in the business of developing immune cell therapies for cancer, and Cognate is in the business of manufacturing clinical grade cellular products on a contract services basis;

WHEREAS, NW Bio and Cognate previously entered into a Services Agreement for the production of NW Bio’s DCVax® Products by Cognate (the “Prior Services Agreement”) and a Conversion and Lock-Up Agreement (the “Lock-Up Agreement”);

WHEREAS, Cognate has dedicated cGMP facilities and other facilities to NW Bio programs, and conducted all of NW Bio’s physical operations including all collections of patient tumor tissues and leukapheresis materials from clinical sites, all manufacturing, quality control, cryopreservation and banking of all DCVax® products, and all distribution and logistics to the point of care throughout the US, as well as management and oversight of all such functions in Europe and Israel;

WHEREAS, both the quantity and the scope of services NW Bio has requested Cognate to provide greatly exceed the maximum amounts contemplated or provided for in the Prior Services Agreement, and the parties have jointly determined that the Prior Services Agreement needs to be amended accordingly, and certain services beyond the core manufacturing services need to be covered in separate agreements;

WHEREAS, Cognate has delivered, and will continue to deliver during the Term of this Agreement, its invoices to NW Bio on a current monthly basis for the services and facilities for NW Bio’s programs (collectively, the “Manufacturing Bills”);

[*]

WHEREAS, Cognate has also undertaken and completed on a highly accelerated basis [*] NW Bio’s DCVax®-Direct product and the manufacturing thereof, [*];

WHEREAS, building upon the initial stages of work already completed, the parties desire to carry out the [*]work required, including research and development, manufacture, distribution and handling of DCVax®-Direct Products for clinical trials and for subsequent commercialization. [*];

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

WHEREAS, the parties also desire to update and reformulate their existing Services Agreement into a more comprehensive and complete set of four agreements consisting of (i) this DCVax-L Manufacturing and Services Agreement, (ii) a new DCVax-Direct Manufacturing And Services Agreement, (iii) a new Ancilliary Services Agreement, and (iv) a new Manufacturing Expansion Services Agreement; and

WHEREAS, the parties also desire to update their existing Quality Agreement associated with the manufacture of DCVax®-Direct and ensure that the new or amended Services Agreements meet the requirements set forth in such Quality Agreement.

AGREEMENT

Now, Therefore, in consideration of the foregoing recitals and the mutual promises, representations, warranties, and covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

SECTION 1:     SERVICES

Cognate will provide to NW Bio, on the terms and conditions set forth herein, Manufacturing Services as provided in Section 1.1. The Manufacturing Services may be referred to herein as the “Services.” Under separate agreements, Cognate will also provide Ancillary Services and Manufacturing Expansion Services as provided in Section 1.2.

1.1    Manufacturing Services

1.1.1 Scope of Manufacturing Services.

(A.) In the U.S., Cognate will provide Manufacturing Services for the production of DCVax®-Direct products for various solid tumor cancers, (the “DCVax®-Direct Product(s)”). Such Manufacturing Services, together with related Ancillary Services, will comprise the services necessary for the production and release of the DCVax®-Direct Products for administration to human patients (including, without limitation, materials management, quarantined inventory, quality control, quality assurance, sterility testing, potency assays and lot release). The Manufacturing Services do not include any services after product release at Cognate’s cGMP manufacturing facility and delivery by Cognate to the shipping company.

(B.) Outside the U.S., under the Prior Services Agreement Cognate has been providing extensive and ongoing technology transfer, technical support and general management and oversight of third party providers and manufacturers, and the services required by NW Bio have been growing and expanding substantially. Following the Effective Date of this Agreement, such services relating to third parties will be provided under the separate agreements for Ancillary Services. [*]. The amounts to be billed by Cognate for such direct Manufacturing Services outside the U.S. will be jointly agreed by the parties based upon market factors and costs, and are anticipated to be substantially higher than in the U.S., particularly with respect to direct and indirect personnel costs. This Agreement will include (and will be further amended and restated as needed to include) direct Manufacturing Services outside the U.S. as soon as Cognate is ready to begin preparations for and implementation of such Services.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

2

1.1.2    Manufacturing Services Capacity.        Cognate will commit to providing the necessary facilities and personnel for production of DCVax®-Direct Products [*]. If NW Bio requests production of DCVax®-Direct Products in excess of the Maximum Product Lots, Cognate will use commercially reasonable efforts to accomplish such excess production as requested, provided that NW Bio pays for such services in accordance with Section 2 hereof.

1.1.3    Regulatory Standards. The Manufacturing Services will be carried out in accordance with current Good Manufacturing Practices (“cGMP”) requirements established by the U.S. Food and Drug Administration (“FDA”), or the equivalent requirements established by the applicable regulators outside the U.S.

1.2    Additional Agreements

Certain additional services relating to the DCVax-L program will be provided at NW BIO’s request under separate agreements. These include an Ancillary Services Agreement and a Manufacturing Expansion Services Agreement. The Ancillary Services will include shipping distribution and logistics services; cryopreservation and storage services; clinical support services; development and validation services; recordkeeping services, and others. The Manufacturing Expansion Services will include oversight, management and support of third party manufacturing outside the U.S., [*] and supporting new and/or upgraded or expanded manufacturing capacity for NW BIO’s programs.

1.3    Quality Agreement

Under the prior Services Agreement, the parties had entered into a Quality Agreement establishing the quality standards to be met in DCVax®-Direct Products, the requirements for product release, the respective roles and responsibilities of NW Bio and Cognate in these processes, the standards and procedures for the handling of any deviations from the usual quality standards or product release requirements, and/or any complaints, the processes and allocation of responsibilities for reporting of these matters, and related subjects. Within one hundred eighty (180) days after the Effective Date of this Agreement, the parties will update the existing Quality Agreement consistent with the terms of this Agreement. Such updated Quality Agreement will be attached hereto as Exhibit A and incorporated herein by reference.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

3

SECTION 2:    PAYMENTS

2.1     Payments for Manufacturing Services in the U.S.

2.1.1     Facilities Capacity Payments.

For regular ongoing costs associated with facilities and equipment to be used in NW Bio programs, NW Bio will pay a monthly Facilities Capacity Payment. Such monthly payment does not include start-up costs, shut down costs, capital expenditures or other non-recurring costs (which are expected to be covered in the separate Manufacturing Expansion Services Agreement). The amount of the monthly Facilities Capacity Payment will be determined in relation to the capacity to provide for a specified number of Product Lots as follows, and will escalate with a consumer price index jointly selected by the parties:

·    [*]

·    [*]

2.1.2 Fixed Fees for Manufacturing Services and Supplies; Minimum Commitments.

(A.) [*]

(B.) [*]

     [*]

     [*]

(C.) [*]

(D.) Cognate will hire, train and maintain sufficient technical staff for the manufacture of such volume of DCVax®-Direct products as specified in the Minimum Commitment below (or such higher volume as NW Bio may request and may be jointly agreed), and for ongoing regulatory compliance for such volume of DCVax®-Direct products.

(E.) Notwithstanding anything to the contrary, NW Bio hereby commits to a minimum volume of DCVax®-Direct Products (the “Minimum Commitment”) equal to [*]

(F.) [*]

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

4

2.1.3 Start-up, Change, Reduction and/or Shut-down Costs, Capital Expenditures:

For each program and/or facility that NW Bio desires to start up, expand, upgrade, change, reduce or shut down, Cognate will prepare budgets for the capital expenditures required. NW Bio will review and approve the applicable budgets for the capital expenditures involved in each such program or site start-up, expansion, upgrade, change, reduction or shut-down. NW Bio will pay the budgeted capital expenditures. If NW Bio decides for any reason to shut-down or suspend the DCVax®-Direct program in whole or in part, the following shutdown or suspension fees shall apply to cover costs associated with such a shutdown or suspension. These fees are separate from and additional to any other payments under this Agreement, including any remedies in connection with any breach of this Agreement whether such breach is associated with such shut down, suspension or substantial delay or otherwise.

[*]

[*]

[*]

[*]

2.1.4 Expansion Planning and Implementation Costs:

Until the Manufacturing Expansion Services Agreement is executed between the parties, for each program and/or facility that NW Bio desires to expand, upgrade, or change, Cognate will prepare budgets for the costs involved and the capital expenditures required. NW Bio will review and approve the applicable budgets for the costs and the capital expenditures involved in each such expansion. NW Bio will pay the budgeted costs and capital expenditures.

2.2 Payment for Manufacturing, and/or Supervisory Services Outside the U.S.

[*]. Such services will be covered under a separate Agreement, as needed, but in the absence of such a separate Agreement, the parties agree that such Services will be paid on market terms proportional in the applicable country market to the terms under to this Agreement, adjusted for the higher costs of such manufacturing services being performed [*].

2.3    Reimbursement of Travel Costs

In addition to the payments for various services and expenses provided in this Section 2, NW Bio will reimburse all travel-related costs incurred by Cognate in performing any services hereunder. Such reimbursements will include appropriate per diem travel cost payments, to be jointly agreed by the parties in connection with each set of services, and reimbursement of all travel-related costs not covered by agreed per diem payments.

2.4    [*]

[*]

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

5

2.5    Credit Terms and Collection Costs

If NW Bio does not make a payment or reimbursement when due, the outstanding unpaid amounts will accrue interest at a default interest rate of one and one-half percent (1-1/2%) per month. If any collection action is undertaken to collect unpaid amounts, NW Bio will pay all fees and costs associated with such collection actions including, without limitation, reasonable attorneys’ fees, as incurred.

2.6    Yearly Adjustment

All payment amounts referenced in this Agreement shall be subject to a yearly increase of three percent (3%). The first increase shall be effective on the first invoice after the 12 month anniversary of this Agreement.

2.7    Milestone and Initiation Payments

The disinterested members of the Board of Directors of NW Bio agree that the magnitude of the undertakings now being asked of Cognate, particularly in view of the extraordinary performance by Cognate to date, and the scale and scope of services needed, which far exceeds the parties’ expectations when the Prior Agreement was entered into, [*]. NW Bio will also make milestone payments to Cognate upon the achievement of mutually agreed operational milestones, [*].

2.8    Other Payment Terms

2.8.1 Payment of Manufacturing Bills Pursuant to Work Performed Under the Terms of this Agreement: Payment of Manufacturing Bills will be due within fifteen (15) after the invoice date. In the event that NW Bio fails to pay any Manufacturing Bills within fifteen (15) days after the invoice date, then commencing thirty (30) days after the invoice date and continuing until paid in full by cash and/or stock, the overdue amount will bear default interest at the rate of one and one-half percent (1-1/2%) per month. At least half of all Manufacturing Bills during the first eighteen (18) months following the Effective Date of this Agreement (the “Conversion Period”) will be paid in shares of NW Bio common stock, with the remaining portions of such Manufacturing Bills paid in cash. [*]. The conversion price for any conversions after the Conversion Period will be jointly determined by the parties, based upon market factors. With respect to any shares of NW Bio stock to be issued hereunder, Cognate may elect to receive unregistered shares immediately (with registration rights as provided herein) or to receive registered shares on the earliest date that any registered shares are issued to any other investors after the date of the Manufacturing Bill being converted. [*].

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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2.8.2 Most Favored Nation Conversion Terms: Notwithstanding anything to the contrary herein, or in any other document or source any amounts owed that are paid by NW Bio in shares, warrants and/or other securities of any kind (such as restricted stock units, convertible debt securities or other) issued or issuable under in connection with this Agreement (including any subsequent amendments hereof), will be subject to adjustment on a most favored nation basis relative to the terms provided or applied to any other investor or creditor of NW Bio during the Term of this Agreement or the Lock-Up Agreement, so that the terms of all shares, warrants and other securities issued or issuable under this Agreement will have terms no less favorable to Cognate than the terms of any shares, warrants and/or other securities issued or issuable to any other investor or creditor during the Term of this Agreement or the Lock-Up Agreement. For the avoidance of doubt, the application of most favored nation treatment will include not only the price and terms of securities issued but also the addition of, and terms relating to, additional securities, and additional rights and/or benefits to the investor or creditor (including warrants, rights of first refusal, registration rights, pre-emptive rights, and/or other securities, rights or benefits). Such most favored nation adjustments may be implemented at any time or times after being triggered by terms provided to other investors or creditors, and may be triggered on multiple occasions with respect to a particular security issued hereunder.

SECTION 3:     CONFIDENTIALITY

In connection with this Agreement, the parties will maintain a mutual Confidentiality Agreement.

SECTION 4:     REPRESENTATIONS AND WARRANTIES

4.1    Agreement Duly Authorized; Valid and Binding Obligations

Cognate and NW Bio each hereby represents and warrants, severally and not jointly, that:

4.2.1    Such party is a corporation or entity duly organized, validly existing and in good standing under the laws of the jurisdiction where such party is domiciled, and has all necessary power and authority to (i) own, operate and occupy its properties and to carry on its business as presently conducted and (ii) enter into this Agreement and the other agreements, instruments and documents contemplated hereby, and to consummate the transactions contemplated hereby and thereby. Such party is qualified to do business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect.

4.2    All necessary corporate or other proceedings, votes, resolutions, consents, waivers and approvals relating to the sale and purchase of shares have been completed by the applicable party. Upon execution, this Agreement will constitute a valid and legally binding obligation of the party, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

4.2    Valid Issuances; No Violation

NW Bio hereby represents and warrants that:

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Upon issuance hereunder, each conversion share will be validly issued, fully paid and non-assessable. The execution, delivery, performance, issuance, sale and delivery of this Agreement and compliance with the provisions hereof by NW Bio will not (a) violate any provision of NW Bio’s certificate of incorporation or bylaws or, to the knowledge of the NW Bio, any law, statute, rule or regulation applicable to or NW Bio any order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable to NW Bio or any of its assets or (b) conflict with or result in any material breach of any of the terms or conditions of any agreement or instrument to which NW Bio is a party, or give rise to any right of termination, cancellation or acceleration under any such agreement or instrument, or result in the creation of any lien or other encumbrance upon any of the material assets of NW Bio.

4.3    No Warranties of Merchantability or Fitness

EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, COGNATE MAKES NO WARRANTIES OR REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, WITH RESPECT TO ANY DCVAX®-DIRECT PRODUCTS OR ANY SERVICES RENDERED HEREUNDER, OR ANY TECHNOLOGY THAT MAY BE USED IN SUCH SERVICES OR INCORPORATED INTO SUCH DCVAX®-DIRECT PRODUCTS.

SECTION 5:     INSURANCE, INDEMNIFICATION, LIABILITY

5.1    NW Bio Insurance Obligations

NW Bio is required to obtain and to maintain throughout the term of this Agreement, in such amounts as are reasonably acceptable to Cognate, (a) clinical trial insurance covering all clinical trials of DCVax®-Direct Products, (b) all-risks umbrella insurance, (c) product liability insurance covering the distribution, use and administration of DCVax®-Direct Products to patients, and (d) such other insurance as is reasonable or customary in the industry. Cognate shall be a named insured and beneficiary on all such insurance coverages.

5.2    Cognate Insurance Obligations

Cognate is required to obtain and to maintain throughout the term of this Agreement, in such amounts as are reasonably acceptable to NW Bio, (a) product liability insurance covering the manufacture of DCVax®-Direct Products by Cognate, and (b) such other insurance as is reasonable or customary in the industry. NW Bio shall be a named insured and beneficiary on all such insurance coverages.

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5.3    Indemnification

In addition to all rights and remedies available to Cognate at law or in equity, NW Bio will indemnify and hold harmless Cognate and its successors, assigns, affiliates and their respective present and former directors, officers, partners, employees, agents, representatives, shareholders, successors and assigns (each an "Indemnified Party") to the fullest extent permitted by law from and against all costs, expenses, losses, claims, damages, liabilities, [*]) (a) arising from or relating to this Agreement and/or any transactions or services contemplated hereunder, (b) arising from or relating to any changes from the original agreement of the parties as described herein, or arising from or relating to a delayed agreement, or arising from or relating to from delayed payment, delayed conversions and/or delayed issuances hereunder beyond the applicable Manufacturing Bill dates or other applicable reference dates, and (c) arising from or relating to any use or administration to patients of DCVax®-Direct Products manufactured by Cognate, provided that Cognate has manufactured such DCVax® Products substantially in accordance with the applicable specifications or SOPs for such DCVax®-Direct Products and/or with commercially reasonable deviation from such SOPs. NW Bio will pay all fees and expenses (including reasonable attorneys’ fees), as incurred, which are incurred by or on behalf of an Indemnified Party, or to which an Indemnified Party may become subject, in connection with any matters covered by this indemnification and/or in connection with investigating, preparing, pursuing, defending and resolving any threatened or pending claim, action, proceeding or investigation (collectively, “Proceedings") arising therefrom, whether or not such Indemnified Party is a formal party to such Proceedings.

5.4 No Consequential Damages

Notwithstanding anything to the contrary, in no event shall either party shall be liable hereunder, on any basis, for any indirect or consequential damages.

SECTION 6:    TERM AND TERMINATION

6.1    Term

This Agreement will remain in force until the later of seven (7) years from the Effective Date (the “Term”) or five (5) years after the first commercial sales of DCVax®-Direct Products pursuant to a Biologics License Application or marketing authorization (not a compassionate use, hospital exemption or similar authorization), unless terminated earlier pursuant to Section 6.2.

6.2    Termination

Either party may terminate this Agreement in the event of a material breach by the other party which remains uncured after notice of such breach for a period of thirty (30) days in the case of a monetary breach, or a period of one hundred twenty (120) days in the case of a non-monetary breach that is material to the contract taken as a whole.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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SECTION 7:    REGISTRATION

7.1. Unregistered Shares.

For any conversion shares issued hereunder which are unregistered under the Securities Act of 1933, as amended (the “Securities Act”) at the time of issuance, the certificates evidencing such unregistered conversion shares may, if necessary, bear the following legend (or a substantially similar legend) and such other legends as may be required by applicable laws:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR UNLESS SUCH TRANSACTION IS IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS.”

7.2    Registration.    

Cognate will be entitled to “piggyback” registration rights, with respect to all unregistered conversion shares issued hereunder and all other shares and securities of NW Bio owned by Cognate and its affiliates, in any registrations effected by NW Bio until all such shares and securities have been registered. NW Bio will use commercially reasonable efforts to complete registration of such unregistered conversion shares by the earlier of six (6) months after the Effective Date of this Agreement or six (6) months after issuance during the Term of this Agreement.

7.3    Registration Costs.    

NW Bio will bear all costs and expenses (including attorneys’ fees) relating to the preparation and filing of all registrations which NW Bio is required to undertake pursuant to this Agreement. 

SECTION 8:     MISCELLANEOUS

8.1    Governing Law

This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law.

8.2    Entire Agreement

This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof, and supersedes all prior agreements for DCVax®-Direct, understandings, promises or undertakings with respect to the subject matter hereof, provided however, that this Agreement is part of a package of agreements which also includes a DCVax®-L Services Agreement and multiple Ancillary Services agreements (including a Clinical Support, Shipping, Distribution and Logistics, and Scheduling Specialty Services Agreement, a Manufacturing Expansion and Support Agreement and related agreements).

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8.3    Amendments

Except as otherwise expressly provided herein, this Agreement may not be amended except by a written instrument signed by both parties hereto.

8.4    Adjustments for Stock Splits and Similar Transactions

In the event of a stock split, reverse split or other similar transaction during the Term of this Agreement, the prices and other numbers herein will be adjusted accordingly.

8.5    Survival

The provisions of Sections 2 - 5 herein will survive the expiration or termination of this Agreement until expiration of the applicable statute of limitations.    

8.6    Notices

Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to be effective upon delivery when delivered (a) personally; (b) by facsimile or email, provided a copy is mailed no later than the next business day through a nationally recognized overnight delivery service; or (c) by overnight delivery through a nationally recognized overnight delivery service, in each case properly addressed to the receiving party at such address or facsimile number as the receiving party has furnished to the sending party in writing.

8.7    Severability

If one or more provisions of this Agreement are held to be unenforceable under applicable law, then such provision shall be excluded from this Agreement, the balance of the Agreement shall be enforceable in accordance with its terms, and the parties shall negotiate in good faith to amend or add to the provisions of this Agreement to effectuate as nearly as reasonably practicable, and as nearly as permitted under applicable law, the original intent of the parties with respect to the provision excluded.

8.8    Successors and Assigns

Except as otherwise expressly provided herein, the provisions hereof will be binding upon, and inure to the benefit of the respective successors, assigns, heirs, executors and administrators of the parties hereto. Neither party hereto may transfer all or any portion of its rights under this Agreement to a third party other than an affiliate without the prior written consent of the other party hereto.    

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8.9    Interpretations

All pronouns and any variations thereof will be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons or entity or entities may require. All references to “$” or dollars herein will be construed to refer to United States dollars. The titles of the Sections and subsections of this Agreement are for convenience or reference only and are not to be considered in construing this Agreement. All references to “including” shall be deemed to mean “including, without limitation.”

8.10    Counterparts

This Agreement may be executed in counterparts, each of which when so executed and delivered will constitute a complete and original instrument but all of which together will constitute one and the same agreement, and it will not be necessary when making proof of this Agreement or any counterpart thereof to account for any counterpart other than the counterpart of the party against whom enforcement is sought.

[signatures on the following page]

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IN WITNESS WHEREOF, the parties have executed this Services Agreement effective as of the date first set forth above.

NORTHWEST	COGNATE BIOSERVICES, INC.
BIOTHERAPEUTICS, INC.
By:	By:
Name:	Name:

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EX-10.42

Exhibit 10.42

*Portions of this exhibit marked [*] are requested to be treated confidentially.

ANCILLARY SERVICES AGREEMENT

This Ancillary Services Agreement (this “Agreement”) is entered into, effective as of January 17, 2014 (the “Effective Date”), by and between Cognate BioServices, a Delaware corporation (Cognate”), and Northwest Biotherapeutics, a Delaware corporation (“NW Bio”).

RECITALS

WHEREAS, NW Bio is in the business of developing immune cell therapies for cancer, and Cognate is in the business of manufacturing clinical grade cellular products on a contract services basis;

WHEREAS, NW Bio and Cognate previously entered into a Services Agreement for the production of NW Bio’s DCVax® Products by Cognate (the “Prior Services Agreement”), effective April 1, 2011, and a Conversion and Lock-Up Agreement (the “Lock-Up Agreement”);

WHEREAS, Cognate has dedicated cGMP facilities and other facilities to NW Bio programs,[*];

WHEREAS, both the quantity and the scope of services NW Bio has requested that Cognate provide greatly exceed the maximum scope and amounts contemplated or provided for in the Prior Services Agreement;

WHEREAS, at NW Bio’s request, certain services [*] were undertaken by Cognate on a highly expedited basis in order to meet certain NW Bio timelines prior to this Agreement;

WHEREAS, Cognate has successfully accomplished all milestones planned by the parties or requested by NW Bio, and NW Bio wishes to recognize such accomplishments and incentivize Cognate to achieve further milestones by awarding milestone based bonuses during the Term of this Agreement;

WHEREAS, NW Bio is continuing to substantially expand its clinical programs both in the US and abroad, NW Bio also anticipates undertaking and/or expanding compassionate use and/or other early access or expanded access programs [*], and NW Bio needs corresponding ongoing expansion of the quantity and scope of services provided by Cognate for these programs.

WHEREAS, NW Bio’s DCVax Products may potentially be applicable to tens or hundreds of thousands of patients or more. [*];

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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WHEREAS, the parties desire to enter into a specialty services agreement, in the form of this Ancillary Services Agreement, for the clinical and commercial support services, including cryopreservation, shipping, manufacturing and quality control/quality assurance validation, product distribution, logistics and scheduling of the DCVax® Products for clinical trials and for subsequent commercialization as defined herein;

WHEREAS, the parties also desire to update and reformulate their existing Services Agreement into a more comprehensive and complete set of four agreements consisting of (i) this Ancillary Services Agreement, (ii) a new DCVax-L Manufacturing and Services Agreement, (iii) a new DCVax-Direct Manufacturing and Services Agreement, and (iv) a new Manufacturing Expansion Services Agreement;

[*].

AGREEMENT

Now, Therefore, in consideration of the foregoing recitals and the mutual promises, representations, warranties, and covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties hereby agree as follows:

SECTION 1:    SERVICES

1.1    General

1.1.1 NW Bio will obtain from Cognate, and Cognate will provide to NW Bio, on the terms and conditions set forth herein, Cryopreservation and Storage Services as provided in Section 1.2, Clinical and Commercial Support Services as provided in Section 1.3; Supplier Sourcing, Validation and Monitoring as provided in Section 1.4; Shipping, Distribution and Logistics Services as provided in Section 1.5; Scheduling System and Other Software Design, Development and Services as provided in Section 1.6; Recordkeeping as provided in Section 1.7; Product and Process Validation Services, as provided in Section 1.8; and such other services as may be necessary, as provided in Section 1.9, in connection with the clinical site interactions and the development, manufacturing, storage, tracking, shipping, logistics, distribution and follow-up of DCVax® Products for clinical trials, early access and expanded access programs (including compassionate use programs), and commercialization (collectively, the “DCVax Products”). All of the foregoing services, collectively, comprise the “Ancillary Services” or the “Services.”

1.1.2 During the Term of this Agreement, on an ongoing basis, the parties will jointly determine the Ancillary Services required for NW Bio’s programs, and will enter into sub-agreements or work orders for such Services which will be attached hereto as Exhibits and incorporated herein by reference. Where applicable, Cognate may sub-contract with or retain one or more experts or third parties to assist in the provision of Ancillary Services and will include such experts and third parties in the applicable sub-agreements or work orders, [*]

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

2

1.1.3 The parties acknowledge and agree that the clinical site interactions and the development, manufacturing, storage, tracking, shipping, logistics, distribution and follow-up of DCVax® Products [*]

1.2    Cryopreservation and Storage Services

1.2.1 Cognate will provide (a) cryopreservation and storage of the DCVax® Products and related reagents and materials, including both short-term and long-term storage of DCVax® Products and of materials related to or to be used in the DCVax® Products; (b) evaluation and testing, design, procurement, development, installation, operation and maintenance of necessary cryopreservation equipment and facilities (especially for dedicated storage); (c) procurement and maintenance of the materials and reagents used in the production and processing of the DCVax® Products [*]; (d) processing and preparation of the DCVax® Products for freezing; (e) freezing and frozen maintenance of the DCVax® Products; (f) [*] and (g) preparation of the DCVax® Products for shipment and tracking as provided below (the foregoing, collectively, “Cryopreservation and Storage Services”). Such Cryopreservation and Storage Services will include materials and reagents used in the manufacture of DCVax® Products, as well as patient-specific biomaterials (including immune cells, tumor tissue and other) [*].

1.2.2 Cognate will perform capacity assessments to determine the cryopreservation and storage equipment and facilities needed for specified numbers of patients for the DCVax® Products, will advise NW Bio of the equipment and facilities required, and will develop and implement designs and plans for such equipment and facilities, and the procurement, development, installation and set-up, calibration, validation and certification thereof, both initially and on an ongoing basis.

1.2.3 [*]

1.3    Clinical and Commercialization Support Services

1.3.1 Cognate will assist NW Bio in training clinical trial sites about the DCVax technology and products [*] Cognate will help provide communication and coordination support between and among NW Bio, the trial sites, the contract research organization managing the applicable trial (particularly in regard to the management and allocation of manufacturing capacity, and the timing and delivery of products to the sites, and reagents needed to transport patient’s tissues to Cognate, as needed). Cognate will provide similar assistance for NW Bio and the sites for commercialization of the DCVax® Products.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

3

1.3.2 Cognate will assist NW Bio in training new clinical sites on the requirements of the clinical protocol during site initiation visits in NW Bio’s clinical programs. Cognate will provide similar training services for the initiation of commercial sites following approvals of the DCVax® Products. [*]

1.3.3 [*]

1.3.4 [*]

1.4    Supplier Sourcing, Validation and Monitoring

1.4.1    Requirements. All supplies and ingredients used in the production, cryopreservation and use of DCVax® Products [*] must be procured from suppliers who are in compliance with applicable [*] regulatory requirements, and acceptable to the regulatory authorities in the applicable countries. [*]

1.4.2    Cognate Services.    Cognate will identify potentially suitable suppliers and will conduct such initial and ongoing supplier evaluations, inspections, validation and monitoring in accordance with applicable regulatory requirements. Cognate will also identify potentially suitable supplies and ingredients for DCVax® Products, and conduct the initial and ongoing testing of each lot or batch of such supplies and ingredients, in accordance with applicable regulatory requirements. [*]

1.5    Shipping, Distribution and Logistics Services

1.5.1 Cognate will coordinate and manage or oversee (a) the preparation of the tumor collection kits, leukapheresis collection kits and other materials as well as the finished DCVax® Products for shipment to the clinical and commercial sites, (b) the scheduling, pick-up and other aspects of arrangements with the shipping companies for shipments to the sites and back from the clinical and commercial sites to the manufacturing facilities, (c) the tracking of shipments and deliveries, and (d) such other services as may be necessary for the outgoing shipment and distribution of all kits and other materials to the sites, the incoming shipments of kits from the sites to the manufacturing facilities, and the outgoing shipments of finished DCVax® Products to the sites. Notwithstanding the foregoing, Cognate will not be responsible in any way on any basis, either directly or indirectly, for the handling or condition of any DCVax® Products after such DCVax® Products leave the manufacturing facility [*]

1.5.2 Cognate will procure the necessary materials and assemble and/or produce the kits needed for tumor tissue collection and for leukapheresis collection for the DCVax® Products.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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1.5.3 (a) Specialized “dry shipper” shipping containers, filled with liquid nitrogen (LN2), are required for the shipment of frozen DCVax® Products in order to maintain sufficiently cold temperatures [*]

(b) [*]

(c) [*]

(d) [*]

1.6    Scheduling and Software Services

1.6.1 Extensive scheduling is required for each patient who is to be treated with DCVax® Products, and the scheduling process includes but is not limited to:

·    [*]

·    [*]

·     [*]

·     [*]

·    [*]

This scheduling requires extensive interaction between and among the clinical sites, Cognate and NW Bio. The sites must be able to coordinate their scheduling of patient procedures (tumor removal, leukapheresis and DCVax treatments) with the availability of production capacity at the manufacturing facilities. The number of tumor tissues and/or leukapheresis kits that arrive at the manufacturing facilities on a given day must be tightly controlled. [*]

When the DCVax® Products reach commercialization, the extensive scheduling on the foregoing (operational) bases will also have to be coordinated with billing and payments.

1.6.2 [*]

1.6.3 [*]

1.7    Documentation and Recordkeeping

1.7.1 Regulatory compliance requires numerous documents and extensive recordkeeping. [*] Such records must cover all aspects of the production process, the product ingredients and their sourcing and testing, quality control, quality assurance and product release, and the finished DCVax® Products themselves. In addition, recordkeeping must include information about any serious adverse events related or possibly related to the DCVax® Products. The parties acknowledge and agree that special arrangements are necessary for fulfillment of such comprehensive and long-term recordkeeping obligations. NW Bio will obtain legal and regulatory advice, and determine the scope and extent of recordkeeping required for each country, and so advise Cognate. Cognate will analyze the systems, capacity and other requirements necessary to fulfill the recordkeeping specified by NW Bio, and determine whether other parties may be needed to provide such services. Both NW Bio and Cognate will have full access to all such records and information at all times, whether or not the records are being stored and managed by third parties, or third parties are otherwise involved in the long-term recordkeeping and related regulatory compliance.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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1.7.2 In conjunction with production of DCVax® Products, Cognate will create initial sets of applicable records. Such records will include batch production records and other records required for initial regulatory compliance at the time of production and product release. Both NW Bio and Cognate will have full access to all such records and information at all times, whether or not the records are being stored and managed by third parties, or third parties are otherwise involved in this recordkeeping and related regulatory compliance.

1.8    Product and Process Validation Services

1.8.1 [*]

1.8.2 [*]

1.9    Quality Agreement

A Quality Agreement between the parties is required in order to comply with regulatory requirements. The Quality Agreement establishes and specifies the quality standards to be met in the DCVax® Products, the requirements for product release, the respective roles and responsibilities of NW Bio and Cognate in these processes, the standards and procedures for the handling of any deviations from the usual quality standards or product release requirements, and/or any complaints, the processes and allocation of responsibilities for reporting of these matters, and related subjects. The parties have previously entered into a Quality Agreement, but will need to enter into one or more updated Quality Agreements during the term of this Agreement. As promptly as practicable after the Effective Date of this Agreement, the parties will execute an updated or new Quality Agreement consistent with the terms of this Agreement, and such Quality Agreement will be attached as an exhibit hereto.

1.10    Other Services

In addition to the services provided for under the foregoing Sections 1.1 through 1.9, the parties will determine any other services which may be required for the clinical site interactions and the development, manufacturing, storage, tracking, shipping, logistics, distribution and follow-up of DCVax® Products, and the parties will develop work plans, timelines and budgets for execution of such other services by Cognate pursuant to this Agreement.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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SECTION 2:    PAYMENTS

2.1    Payment Terms for Ancillary Services

2.1.1 The parties will determine and agree upon the payment terms for the Ancillary Services described in Section 1 hereof, subject to the provisions of Section 2.5.2 hereof (for payment of at least half of all Ancillary Services Invoices in stock, with fifty percent (50%) warrant coverage, [*], and such payment terms will be included in the sub-agreements or work orders for such Services that are to be attached hereto as Exhibits. The parties will negotiate and decide all such payment terms in good faith on market based terms with due consideration of any special factors, such as accelerated timetables and related extra costs and difficulties.

2.1.2 For Ancillary Services which require dedicated equipment and/or facilities, the payment terms will include billing of the costs and fees relating to such equipment and facilities to NW Bio. Likewise, for Ancillary Services which require dedicated personnel and/or clean rooms, cold storage, quarantined storage, and/or other dedicated spaces and/or timeslots, the payment terms will include capacity charges as well as usage charges. The payment terms for Ancillary Services will cover a specified amount of such Services [*] chosen by NW Bio. For Services in excess of the amounts NW Bio has chosen and contracted for, the payment terms will require payment at substantial premium levels to cover the excess costs and difficulties of Cognate providing Services in excess of the amounts that NW Bio has chosen and contracted for, and that have been budgeted and planned for.

2.1.3 If Cognate sub-contracts, retains or otherwise arranges for third party experts or others to perform certain Ancillary Services, Cognate will undertake technology transfer to such third parties as needed, and will supervise and oversee performance of such Services by such third parties as needed (collectively, the “Supervisory Services”). NW Bio will pay Cognate fees for the Supervisory Services, and the amounts of such Supervisory Fees will be included in the applicable sub-agreement or work order that is attached hereto as an exhibit and covers such Services.

2.2    Milestone and Initiation Payments

Upon execution of this Agreement, [*]. NW Bio acknowledges and agrees that Cognate’s performance of Ancillary Services to date, including on an accelerated timetable, before even having an agreement in place, have been of great value to NW Bio. NW Bio now needs a greatly expanded scope and amount of such Ancillary Services. [*]. NW Bio will also make milestone payments to Cognate upon the achievement of mutually agreed operational milestones. Such milestones may be included in the ongoing sub-agreements or work orders attached hereto as Exhibits, or may be otherwise agreed by the parties. [*]

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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2.3    Reimbursement of Expenses

In addition to the payments for the services and expenses provided in this Section 2, NW Bio will reimburse all expenses, including travel-related costs, incurred by Cognate in performing any Services hereunder and will pay an appropriate per diem amount.

2.4    Annual Cost of Living Increases

All payment amounts provided for pursuant to this Agreement will be subject to an annual increase of three percent (3%). The first increase will be effective on the 12 month anniversary of the Effective Date this Agreement.

2.5    Form and Timing of Payments

2.5.1 Payment of Ancillary Services Bills will be due within fifteen (15) after the invoice date. In the event that NW Bio fails to pay any Ancillary Services Bills within fifteen (15) days after the invoice date, then commencing thirty (30) days after the invoice date and continuing until paid in full by cash and/or stock, the overdue amount will bear default interest at the rate of one and one-half percent (1-1/2%) per month. If any collection action is undertaken to collect unpaid amounts, NW Bio will pay all fees and costs associated with such collection actions including, without limitation, reasonable attorneys’ fees, as incurred.

2.5.2 At least half of all Ancillary Services Bills during the first eighteen (18) months following the Effective Date of this Agreement (the “Conversion Period”) will be paid in shares of NW Bio Common Stock, with the remaining portions of such Ancillary Services Bills paid in cash. [*]. The conversion price for any conversions after the Conversion Period will be jointly determined by the parties, based upon market factors. With respect to any shares of NW Bio Common Stock to be issued hereunder, Cognate may elect to receive unregistered shares immediately (with registration rights as provided herein) or to receive registered shares on the earliest date that any registered shares are issued to any other investors after the invoice date of the Ancillary Services Bill (or Milestone and Initiation Payments) being converted.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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2.6    Most Favored Nation Terms

Notwithstanding anything to the contrary herein, or in any other document or source, any amounts owed that are paid by NW Bio in shares, warrants and/or other securities of any kind (including RSUs, convertible debt securities or other) issued or issuable in connection with this Agreement (including any subsequent amendments hereof), will be subject to adjustment on a most favored nation basis relative to the terms provided to any other investor or creditor of NW Bio during the Term of this Agreement, at Cognate’s election, so that the terms of all shares, warrants and/or other securities issued or issuable under this Agreement will have terms no less favorable to Cognate than the terms of any shares, warrants and/or other securities issued or issuable to any other investor or creditor during the Term of this Agreement or the Lock-Up Agreement. For the avoidance of doubt, the application of most favored nation treatment will include not only the price and terms of securities issued but also the addition of, and terms relating to, additional securities, and additional rights and/or benefits to the investor or creditor (including warrants, rights of first refusal, registration rights, pre-emptive rights, and/or other securities, rights or benefits). Such most favored nation adjustments may be implemented at any time or times after being triggered by terms provided to other investors or creditors, and may be triggered on multiple occasions with respect to a particular security issued hereunder.

2.7    [*]

[*]

SECTION 3:    CONFIDENTIALITY

In connection with this Agreement, the parties will execute and maintain a mutual Confidential Disclosure Agreement substantially in the form attached hereto as an exhibit.

SECTION 4:    REPRESENTATIONS AND WARRANTIES

4.1    Agreement Duly Authorized; Valid and Binding Obligations

Cognate and NW Bio each hereby represents and warrants, severally and not jointly, that:

4.1.1    Such party is a corporation or entity duly organized, validly existing and in good standing under the laws of the jurisdiction where such party is domiciled, and has all necessary power and authority to (i) own, operate and occupy its properties and to carry on its business as presently conducted and (ii) enter into this Agreement and the other agreements, instruments and documents contemplated hereby, and to consummate the transactions contemplated hereby and thereby. Such party is qualified to do business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect.

4.1.2    All necessary corporate or other proceedings, votes, resolutions, consents, waivers and approvals relating to the sale and purchase of shares have been completed by the applicable party. Upon execution, this Agreement will constitute a valid and legally binding obligation of the party, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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4.2    Valid Issuances; No Violation

NW Bio hereby represents and warrants that:

Upon issuance hereunder, each conversion share will be validly issued, fully paid and non-assessable. The execution, delivery, performance, issuance, sale and delivery of this Agreement and compliance with the provisions hereof by NW Bio will not (a) violate any provision of NW Bio’s certificate of incorporation or bylaws or, to the knowledge of NW Bio, any law, statute, rule or regulation applicable to NW Bio, or any order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable to NW Bio or any of its assets or (b) conflict with or result in any material breach of any of the terms or conditions of any agreement or instrument to which NW Bio is a party, or give rise to any right of termination, cancellation or acceleration under any such agreement or instrument, or result in the creation of any lien or other encumbrance upon any of the material assets of NW Bio.

4.3    No Warranties of Merchantability or Fitness

EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, COGNATE MAKES NO WARRANTIES OR REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, WITH RESPECT TO ANY ANCILLARY SERVICES RENDERED HEREUNDER, OR ANY TECHNOLOGY THAT MAY BE USED IN OR INCORPORATED INTO SUCH SERVICES, OR ANY EQUIPMENT OR FACILITIES DEVELOPED, PROVIDED OR USED IN CONNECTION WITH SUCH SERVICES, OR ANY PRODUCTS PRODUCED HEREUNDER.

SECTION 5:    INSURANCE, INDEMNIFICATION, LIABILITY

5.1    NW Bio Insurance Obligations

NW Bio is required to obtain and to maintain throughout the term of this Agreement, in such amounts as are reasonably acceptable to Cognate, (a) clinical trial insurance covering all clinical trials of its DCVax® Products, (b) all-risks umbrella insurance, (c) product liability insurance covering the distribution, use and administration of DCVax® Products to patients in expanded access, early access and compassionate use programs as well as in commercialization, and (d) such other insurance as is reasonable or customary in the industry. Cognate will be a named insured and beneficiary on all such insurance coverages.

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5.3    Indemnification

In addition to all rights and remedies available to Cognate at law or in equity, NW Bio will indemnify and hold harmless Cognate and its successors, assigns, affiliates and their respective present and former directors, officers, partners, employees, agents, representatives, shareholders, successors and assigns (each an "Indemnified Party") to the fullest extent permitted by law from and against all costs, expenses, losses, claims, damages, liabilities, [*] (the foregoing, collectively, “Damages”) (a) arising from or pursuant to or relating to this Agreement and/or any transactions or services contemplated hereunder, including any treatment of patients and any claims for refunds or Damages by or on behalf of patients and/or medical personnel; (b) arising from or relating to any changes from the original agreement of the parties as described herein, or arising from or relating to a delayed agreement, or arising from or relating to delayed payment, delayed conversions and/or delayed issuances hereunder beyond the applicable Ancillary Services Bill dates or other applicable reference dates and/or the most favored nation price applicable to such Ancillary Bill conversions, (or to the Milestone and Initiation Payments), and (c) arising from or relating to any use or administration to patients of DCVax® Products manufactured by Cognate, provided that Cognate has manufactured such DCVax® Products substantially in accordance with the applicable specifications or SOPs for such DCVax® Products and/or with commercially reasonable deviation from such SOPs. NW Bio will pay all fees and expenses (including reasonable attorneys’ fees), as incurred, which are incurred by or on behalf of an Indemnified Party, or to which an Indemnified Party may become subject, in connection with any matters covered by this indemnification and/or in connection with investigating, preparing, pursuing, defending and resolving any threatened or pending claim, action, proceeding or investigation (collectively, “Proceedings") arising therefrom, whether or not such Indemnified Party is a formal party to such Proceedings.

SECTION 6:    TERM AND TERMINATION

6.1    Term

This Agreement will remain in force until the later of seven (7) years from the Effective Date (the “Term”) or five (5) years after the first commercial sales of DCVax® Products pursuant to a Biologics License Application or marketing authorization (not a compassionate use, early access, expanded access or similar authorization), unless terminated earlier pursuant to Section 6.2.

6.2    Termination

Either party may terminate this Agreement in the event of a material breach by the other party which remains uncured after notice of such breach for a period of thirty (30) days in the case of a monetary breach, or a period of one hundred twenty (120) days in the case of a non-monetary breach that is material to the contract taken as a whole. The non-breaching party will have all remedies for breach available at law and in equity, including injunction or specific performance, regardless of whether such party elects to terminate this Agreement or not.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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SECTION 7:    REGISTRATION

7.1.    Unregistered Shares.

For any conversion shares issued hereunder which are unregistered under the Securities Act of 1933, as amended (the “Securities Act”) at the time of issuance, the certificates evidencing such unregistered conversion shares may, if necessary, bear the following legend (or a substantially similar legend) and such other legends as may be required by applicable laws:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR UNLESS SUCH TRANSACTION IS IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS.”

7.2    Registration.

Cognate will be entitled to “piggyback” registration rights, with respect to all unregistered conversion shares issued hereunder and all other shares and securities of NW Bio owned by Cognate and its affiliates, in any registrations effected by NW Bio until all such shares and securities have been registered. NW Bio will use commercially reasonable efforts to complete such registrations by the earlier of six (6) months after the Effective Date of this Agreement or six (6) months after issuance during the Term of this Agreement.

7.3    Registration Costs.

NW Bio will bear all costs and expenses (including attorneys’ fees) relating to the preparation and filing of all registrations which NW Bio is required to undertake pursuant to this Agreement. 

SECTION 8:    MISCELLANEOUS

8.1    Governing Law

This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law.

8.2    Entire Agreement

This Agreement (including all exhibits hereto, which are automatically incorporated herein by reference when added hereto during the Term of this Agreement in accordance with this Agreement) constitutes the entire agreement of the parties with respect to the subject matter hereof, and supersedes all prior agreements, understandings, promises or undertakings with respect to the subject matter hereof, provided however, that this Agreement is part of a package of agreements which also includes a DCVax®-L Services Agreement, DCVax®-Direct Services Agreement and Manufacturing Expansion Services Agreement.

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8.3    Amendments

Except as otherwise expressly provided herein, this Agreement may not be amended except by a written instrument signed by both parties hereto.

8.4    Survival

The provisions of Sections 2 – 5, and 7-8 hereof will survive the expiration or termination of this Agreement until expiration of the applicable statutes of limitations.

8.5    Notices

Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to be effective upon delivery when delivered (a) personally; (b) by facsimile or email, provided a copy is mailed no later than the next business day through a nationally recognized overnight delivery service; or (c) by overnight delivery through a nationally recognized overnight delivery service, in each case properly addressed to the receiving party at such address or facsimile number as the receiving party has furnished to the sending party in writing.

8.6    Severability

If one or more provisions of this Note are held to be unenforceable under applicable law, then (i) such provision will be excluded from this Note, (ii) the balance of the Note will be interpreted as if such provision were so excluded, (iii) the balance of the Note will be enforceable in accordance with its terms, and (iv) the parties will negotiate in good faith to amend or add to the provisions of this Note to effectuate as nearly as reasonably practicable, and as nearly as permitted under applicable law, the original intent of the parties with respect to the provision excluded.

8.7    Successors and Assigns

Except as otherwise expressly provided herein, the provisions hereof will be binding upon, and inure to the benefit of the respective successors, assigns, heirs, executors and administrators of the parties hereto. Neither party hereto may transfer all or any portion of its rights under this Agreement to a third party other than an affiliate without the prior written consent of the other party hereto.

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8.8    Interpretations

All pronouns and any variations thereof will be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons or entity or entities may require. All references to “$” or dollars herein will be construed to refer to United States dollars. The titles of the Sections and subsections of this Agreement are for convenience or reference only and are not to be considered in construing this Agreement. All references to “including” will be deemed to mean “including, without limitation.”

8.9    Severability

If any provision of this Agreement is determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

8.10    No Waiver

No delay by a party hereto in exercising or enforcing any rights hereunder will be deemed to be any waiver of such rights. No partial waiver of any right or occurrence hereunder will be deemed to be any broader waiver or waiver of any other right or occurrence, and no waiver on one occasion shall be deemed to be a waiver on any other occasion.

8.11    Counterparts

This Agreement may be executed in counterparts, each of which when so executed and delivered will constitute a complete and original instrument but all of which together will constitute one and the same agreement, and it will not be necessary when making proof of this Agreement or any counterpart thereof to account for any counterpart other than the counterpart of the party against whom enforcement is sought.

[signatures on following page]

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IN WITNESS WHEREOF, the parties have executed this Services Agreement effective as of the date first set forth above.

NORTHWEST	COGNATE BIOSERVICES, INC.
BIOTHERAPEUTICS, INC.
By:	By:
Name:	Name:

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EX-10.43

Exhibit 10.43

Portions of this exhibit marked [*] are requested to be treated confidentially.

MANUFACTURING EXPANSION SERVICES AGREEMENT

This Services Agreement (this “Agreement”) is entered into, effective as of January 17, 2014 (the “Effective Date”), by and between Cognate BioServices, a Delaware corporation (Cognate”), and Northwest Biotherapeutics, a Delaware corporation (“NW Bio”).

RECITALS

WHEREAS, NW Bio is in the business of developing immune cell therapies for cancer, and Cognate is in the business of manufacturing clinical grade cellular products on a contract services basis;

WHEREAS, NW Bio and Cognate previously entered into a Services Agreement for the production of NW Bio’s DCVax® Products by Cognate (the “Prior Services Agreement”) and the Conversion and Lock-Up Agreement (the “Lock-Up Agreement”);

WHEREAS, Cognate has dedicated cGMP facilities and other facilities to NW Bio programs, and conducted all of NW Bio’s physical operations including all collections of patient tumor tissues and leukapheresis materials from clinical sites, all manufacturing, quality control, cryopreservation and banking of all DCVax® Products, and all distribution and logistics to the point of care throughout the US, as well as management and oversight of all such functions in Europe and Israel;

WHEREAS, both the quantity and the scope of services NW Bio has requested that Cognate provide greatly exceed the maximum scope and amounts contemplated or provided for in the Prior Services Agreement [*];

WHEREAS, NW Bio desires [*];

WHEREAS, NW Bio has requested Cognate to provide all necessary services to identify and evaluate potential sites for the manufacturing expansion [*];

[*];

[*];

WHEREAS, the parties also desire to update and reformulate their existing Prior Services Agreement into a more comprehensive and complete set of four agreements including (i) this Manufacturing Expansion Services Agreement; (ii) a DCVax-L Manufacturing and Services Agreement, (iii) a new DCVax-Direct Manufacturing and Services Agreement, and (iv) a new Ancilliary Services Agreement.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

AGREEMENT

Now, Therefore, in consideration of the foregoing recitals and the mutual promises, representations, warranties, and covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

SECTION 1:    SERVICES

1.1    Scope of Services.

Cognate will provide to NW Bio, on the terms and conditions set forth herein, the services required to identify, select, develop, obtain regulatory approvals for, and put into operation [*] expanded manufacturing facilities (collectively, the “Manufacturing Expansion Services” or the “Services”). Cognate will engage experts and other third parties as appropriate to assist with such services [*]. Such Services will include the following:

1.1.1    Identification, Evaluation, Selection and Acquisition of [*] Sites: Cognate will identify [*] sites which may be suitable for, or may be adapted for, manufacturing of DCVax® Products. Cognate will will undertake evaluation of such [*] sites [*].

1.1.2    Design and Engineering: For the [*] sites that are acquired, Cognate will develop the facility layout and design, [*].

[*]

[*]

[*]

[*]

[*]

1.1.8    Other Services: In addition to the services provided for under the foregoing Sections 1.1.1 through 1.1.7, the parties will determine any other services which may be required for manufacturing expansion, and the parties will develop work plans, timelines and budgets for execution of such other services by Cognate pursuant to this Agreement.

1.2    Manufacturing Expansion Locations

The parties currently anticipate that the manufacturing of DCVax® Products will be structured on a regional basis, [*]. This regional approach will enable the tumor tissue collections and leukapheresis collections to reach the manufacturing facilities within the necessary time windows, while also enabling efficient operations with economies of scale.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

2

[*]

[*]

[*]

[*]

SECTION 2:    PAYMENTS

2.1    Payment Terms for Manufacturing Expansion Services

2.1.1 The parties will determine and agree upon the payment terms for the Manufacturing Expansion Services described in Section 1 hereof, subject to the provisions of Section 2.5.2 hereof (for payment of at least half of all Ancillary Services Invoices in stock, with fifty percent (50%) warrant coverage, [*], and such payment terms will be included in the sub-agreements or work orders for such Services that are to be attached hereto as Exhibits. The parties will negotiate and decide all such payment terms in good faith on market based terms, with due consideration of any special factors, such as accelerated timetables and related extra costs and difficulties.

2.1.2 For Manufacturing Expansion Services which require dedicated equipment and/or facilities, the payment terms will include billing of the costs and fees relating to such equipment and facilities to NW Bio. Likewise, for Manufacturing Expansion Services which require dedicated personnel and/or systems or operations, the payment terms will include capacity charges as well as usage charges. The payment terms for Manufacturing Expansion Services will cover a specified amount of such Services (e.g., for a specified site or facility), determined by NW Bio. For Services in excess of the amounts NW Bio has contracted for, the payment terms will require payment at substantial premium levels to cover the excess costs and difficulties of Cognate providing Services in excess of the amounts that NW Bio has chosen and contracted for, and that have been budgeted and planned for.

2.1.3 If Cognate sub-contracts, retains or otherwise arranges for third party experts or others to perform certain Manufacturing Expansion Services, Cognate will undertake technology transfer to such third parties as needed, and will supervise and oversee performance of such Services by such third parties as needed (collectively, the “Supervisory Services”), [*]. NW Bio will pay Cognate fees for the Supervisory Services, and the amounts of such Supervisory Fees will be included in the applicable sub-agreement or work order that is attached hereto as an exhibit and covers such Services.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC. 

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2.2    Milestone and Initiation Payment

[*] NW Bio acknowledges and agrees that Cognate’s performance of Manufacturing Expansion Services to date, including on an accelerated timetable, before even having an agreement in place, have been of great value to NW Bio. NW Bio now needs a further expanded scope and amount of Manufacturing Expansion Services. NW Bio will make Milestone and Initiation payments in connection with the launch of greatly expanded Manufacturing Expansion Services pursuant to this Agreement, and in connection with milestones reached hereunder. [*] NW Bio will also make milestone payments to Cognate upon the achievement of mutually agreed operational milestones. Such milestones will be included in the ongoing sub-agreements or work orders attached hereto as Exhibits, and/or may be otherwise agreed by the parties. [*]

2.3    Reimbursement of Expenses

In addition to the payments for the services and expenses provided in this Section 2, NW Bio will reimburse all expenses, including travel-related costs, incurred by Cognate in performing any Services hereunder, and will pay an appropriate per diem amount.

2.4          Annual Cost of Living Increases

All payment amounts provided for pursuant to this Agreement will be subject to an annual increase of three percent (3%). The first increase will be effective on the 12 month anniversary of the Effective Date this Agreement.

2.5          Form and Timing of Payments

2.5.1 Payment of Manufacturing Expansion Services Bills will be due within fifteen (15) after the invoice date. In the event that NW Bio fails to pay any Manufacturing Expansion Services Bills within fifteen (15) days after the invoice date, then commencing thirty (30) days after the invoice date and continuing until paid in full by cash and/or stock, the overdue amount will bear default interest at the rate of one and one-half percent (1-1/2%) per month. If any collection action is undertaken to collect unpaid amounts, NW Bio will pay all fees and costs associated with such collection actions including, without limitation, reasonable attorneys’ fees, as incurred.

2.5.2 At least half of all Manufacturing Expansion Services Bills during the first eighteen (18) months following the Effective Date of this Agreement (the “Conversion Period”) will be paid in shares of NW Bio Common Stock, with the remaining portions of such Manufacturing Expansion Services Bills paid in cash. [*] The conversion price for any conversions after the Conversion Period will be jointly determined by the parties, based upon market factors. With respect to any shares of NW Bio Common Stock to be issued hereunder, Cognate may elect to receive unregistered shares immediately (with registration rights as provided herein) or to receive registered shares on the earliest date that any registered shares are issued to any other investors after the invoice date of the Manufacturing Expansion Services Bill being converted.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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2.6    Most Favored Nation Terms

Notwithstanding anything to the contrary herein, or in any other document or source, any amounts owed that are paid by NW Bio in shares, warrants and/or other securities of any kind (including RSUs, convertible debt securities or other) issued or issuable in connection with this Agreement (including any subsequent amendments hereof), will be subject to adjustment on a most favored nation basis relative to the terms provided to any other investor or creditor of NW Bio during the Term of this Agreement or the Lock-Up Agreement, at Cognate’s election, so that the terms of all shares, warrants and/or other securities issued or issuable under this Agreement will have terms no less favorable to Cognate than the terms of any shares, warrants and/or other securities issued or issuable to any other investor or creditor during the Term of this Agreement. For the avoidance of doubt, the application of most favored nation treatment will include not only the price and terms of securities issued but also the addition of, and terms relating to, additional securities, and additional rights and/or benefits to the investor or creditor (including warrants, rights of first refusal, registration rights, pre-emptive rights, and/or other securities, rights or benefits). Such most favored nation adjustments may be implemented at any time or times after being triggered by terms provided to other investors or creditors, and may be triggered on multiple occasions with respect to a particular security issued hereunder.

2.7    [*]

[*]

SECTION 3:    CONFIDENTIALITY

In connection with this Agreement, the parties will execute and maintain a mutual Confidential Disclosure Agreement substantially in the form attached hereto as an exhibit.

SECTION 4:    REPRESENTATIONS AND WARRANTIES

4.1    Agreement Duly Authorized; Valid and Binding Obligations

Cognate and NW Bio each hereby represents and warrants, severally and not jointly, that:

4.1.1    Such party is a corporation or entity duly organized, validly existing and in good standing under the laws of the jurisdiction where such party is domiciled, and has all necessary power and authority to (i) own, operate and occupy its properties and to carry on its business as presently conducted and (ii) enter into this Agreement and the other agreements, instruments and documents contemplated hereby, and to consummate the transactions contemplated hereby and thereby. Such party is qualified to do business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect.

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

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4.1.2    All necessary corporate or other proceedings, votes, resolutions, consents, waivers and approvals relating to the sale and purchase of shares have been completed by the applicable party. Upon execution, this Agreement will constitute a valid and legally binding obligation of the party, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

4.2    Valid Issuances; No Violation

NW Bio hereby represents and warrants that:

Upon issuance hereunder, each conversion share will be validly issued, fully paid and non-assessable. The execution, delivery, performance, issuance, sale and delivery of this Agreement and compliance with the provisions hereof by NW Bio will not (a) violate any provision of NW Bio’s certificate of incorporation or bylaws or, to the knowledge of NW Bio, any law, statute, rule or regulation applicable to NW Bio, or any order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable to NW Bio or any of its assets or (b) conflict with or result in any material breach of any of the terms or conditions of any agreement or instrument to which NW Bio is a party, or give rise to any right of termination, cancellation or acceleration under any such agreement or instrument, or result in the creation of any lien or other encumbrance upon any of the material assets of NW Bio.

4.3    No Warranties of Merchantability or Fitness

EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, COGNATE MAKES NO WARRANTIES OR REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, WITH RESPECT TO ANY MANUFACTURING EXPANSION SERVICES RENDERED HEREUNDER, OR ANY TECHNOLOGY THAT MAY BE USED IN OR INCORPORATED INTO SUCH SERVICES, OR ANY EQUIPMENT OR FACILITIES DEVELOPED, PROVIDED OR USED IN CONNECTION WITH SUCH SERVICES, OR ANY PRODUCTS PRODUCED HEREUNDER.

SECTION 5:    INSURANCE, INDEMNIFICATION, LIABILITY

5.1    NW Bio Insurance Obligations

NW Bio is required to obtain and to maintain throughout the term of this Agreement, in such amounts as are reasonably acceptable to Cognate, (a) clinical trial insurance covering all clinical trials of its DCVax® Products, (b) all-risks umbrella insurance, (c) product liability insurance covering the distribution, use and administration of DCVax® Products to patients in expanded access, early access and compassionate use programs as well as in commercialization, and (d) such other insurance as is reasonable or customary in the industry. Cognate will be a named insured and beneficiary on all such insurance coverages.

6

5.2    Cognate Insurance Obligations

Cognate is required to obtain and to maintain throughout the term of this Agreement, in such amounts as are reasonably acceptable to NW Bio, (a) product liability insurance covering the manufacture of its DCVax® Products by Cognate, and (b) such other insurance as is reasonable or customary in the industry. NW Bio will be a named insured and beneficiary on all such insurance coverages.

5.3    Indemnification

In addition to all rights and remedies available to Cognate at law or in equity, NW Bio will indemnify and hold harmless Cognate and its successors, assigns, affiliates and their respective present and former directors, officers, partners, employees, agents, representatives, shareholders, successors and assigns (each an "Indemnified Party") to the fullest extent permitted by law from and against all costs, expenses, losses, claims, damages, liabilities, [*] (the foregoing, collectively, “Damages”) (a) arising from or pursuant to or relating to this Agreement and/or any transactions or services contemplated hereunder, including any treatment of patients and any claims for refunds or Damages by or on behalf of patients and/or medical personnel; (b) arising from or relating to any changes from the original agreement of the parties as described herein, or arising or relating to a delayed agreement, or arising from or relating to delayed payment, delayed conversions and/or delayed issuances hereunder beyond the applicable Manufacturing Services Bill dates or other applicable reference dates and/or the most favored nation price applicable to such Manufacturing Bill conversions, or to the Milestone and Initiation Payments, and (c) arising from or relating to any use or administration to patients of DCVax® Products manufactured by Cognate, provided that Cognate has manufactured such DCVax® Products substantially in accordance with the applicable specifications or SOPs for such DCVax® Products and/or with commercially reasonable deviation from such SOPs. NW Bio will pay all fees and expenses (including reasonable attorneys’ fees), as incurred, which are incurred by or on behalf of an Indemnified Party, or to which an Indemnified Party may become subject, in connection with any matters covered by this indemnification and/or in connection with investigating, preparing, pursuing, defending and resolving any threatened or pending claim, action, proceeding or investigation (collectively, “Proceedings") arising therefrom, whether or not such Indemnified Party is a formal party to such Proceedings.

SECTION 6:    TERM AND TERMINATION

6.1    Term

This Agreement will remain in force until the later of until the later of seven (7) years from the Effective Date (the “Term”) or five (5) years after the first commercial sales of DCVax® Products pursuant to a Biologics License Application or marketing authorization (not a compassionate use, early access, expanded access or similar authorization), unless terminated earlier pursuant to Section 6.2.

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6.2    Termination

Either party may terminate this Agreement in the event of a material breach by the other party which remains uncured after notice of such breach for a period of thirty (30) days in the case of a monetary breach, or a period of one hundred twenty (120) days in the case of a non-monetary breach that is material to the contract taken as a whole. The non-breaching party will have all remedies for breach available at law and in equity, including injunction or specific performance, regardless of whether such party elects to terminate this Agreement or not.

SECTION 7:    REGISTRATION

7.1.    Unregistered Shares.

For any conversion shares issued hereunder which are unregistered under the Securities Act of 1933, as amended (the “Securities Act”) at the time of issuance, the certificates evidencing such unregistered conversion shares may, if necessary, bear the following legend (or a substantially similar legend) and such other legends as may be required by applicable laws:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR UNLESS SUCH TRANSACTION IS IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS.”

7.2    Registration.

Cognate will be entitled to “piggyback” registration rights, with respect to all unregistered conversion shares issued hereunder and all other shares and securities of NW Bio owned by Cognate and its affiliates, in any registrations effected by NW Bio until all such shares and securities have been registered. NW Bio will use commercially reasonable efforts to complete such registrations by the earlier of six (6) months after the Effective Date of this Agreement or six (6) months after issuance during the Term of this Agreement.

7.3    Registration Costs.

NW Bio will bear all costs and expenses (including attorneys’ fees) relating to the preparation and filing of all registrations which NW Bio is required to undertake pursuant to this Agreement.

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SECTION 8:    MISCELLANEOUS

8.1    Governing Law

This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law.

8.2    Entire Agreement

This Agreement (including all exhibits hereto, which are automatically incorporated herein by reference when added hereto during the Term of this Agreement in accordance with this Agreement) constitutes the entire agreement of the parties with respect to the subject matter hereof, and supersedes all prior agreements, understandings, promises or undertakings with respect to the subject matter hereof, provided however, that this Agreement is part of a package of agreements which also includes a DCVax®-L Services Agreement, DCVax®-Direct Services Agreement and Manufacturing Expansion Services Agreement.

8.3    Amendments

Except as otherwise expressly provided herein, this Agreement may not be amended except by a written instrument signed by both parties hereto.

8.4    Survival

The provisions of Sections 2 – 5, and 7 hereof will survive the expiration or termination of this Agreement until expiration of the applicable statute of limitations.

8.5    Notices

Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to be effective upon delivery when delivered (a) personally; (b) by facsimile or email, provided a copy is mailed no later than the next business day through a nationally recognized overnight delivery service; or (c) by overnight delivery through a nationally recognized overnight delivery service, in each case properly addressed to the receiving party at such address or facsimile number as the receiving party has furnished to the sending party in writing.

8.6    Severability

If one or more provisions of this Note are held to be unenforceable under applicable law, then (i) such provision will be excluded from this Note, (ii) the balance of the Note will be interpreted as if such provision were so excluded, (iii) the balance of the Note will be enforceable in accordance with its terms, and (iv) the parties will negotiate in good faith to amend or add to the provisions of this Note to effectuate as nearly as reasonably practicable, and as nearly as permitted under applicable law, the original intent of the parties with respect to the provision excluded.

9

8.7    Successors and Assigns

Except as otherwise expressly provided herein, the provisions hereof will be binding upon, and inure to the benefit of the respective successors, assigns, heirs, executors and administrators of the parties hereto. Neither party hereto may transfer all or any portion of its rights under this Agreement to a third party other than an affiliate without the prior written consent of the other party hereto.

8.8    Interpretations

All pronouns and any variations thereof will be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons or entity or entities may require. All references to “$” or dollars herein will be construed to refer to United States dollars. The titles of the Sections and subsections of this Agreement are for convenience or reference only and are not to be considered in construing this Agreement. All references to “including” will be deemed to mean “including, without limitation.”

8.9    Severability

If any provision of this Agreement is determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

8.10    No Waiver

No delay by a party hereto in exercising or enforcing any rights hereunder will be deemed to be any waiver of such rights. No partial waiver of any right or occurrence hereunder will be deemed to be any broader waiver, or waiver of any other right or occurrence, and no waiver on one occasion shall be deemed to be a waiver on any other occasion.

8.11    Counterparts

This Agreement may be executed in counterparts, each of which when so executed and delivered will constitute a complete and original instrument but all of which together will constitute one and the same agreement, and it will not be necessary when making proof of this Agreement or any counterpart thereof to account for any counterpart other than the counterpart of the party against whom enforcement is sought.

[signatures on following page]

10

IN WITNESS WHEREOF, the parties have executed this Manufacturing Expansion Services Agreement effective as of the date first set forth above.

NORTHWEST	COGNATE BIOSERVICES, INC.
BIOTHERAPEUTICS, INC.
By:	By:
Name:	Name:

11

EX-31.1

EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, Linda F. Powers, certify that:

(1)          I have reviewed this quarterly report on Form 10-Q of Northwest Biotherapeutics, Inc.;

(2)          Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)          Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4)          I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)), for the registrant and have:

(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its condensed consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)          Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5)          I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2014
By:	/s/ Linda F. Powers
	Name:	Linda F. Powers
	Title:	President and Chief Executive Officer
		Principal Executive Officer
		Principal Financial and Accounting Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Northwest Biotherapeutics, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2014, as filed with the Securities and Exchange Commission (the “Report”), I, Linda F. Powers, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)          The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)          The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 15, 2014
By:	/s/ Linda F. Powers
	Name:	Linda F. Powers
	Title:	President and Chief Executive Officer
		Principal Executive Officer
		Principal Financial and Accounting Officer

XML

Stockholders' Deficit (Details Textual) (USD $)	3 Months Ended		216 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
Shareholders Deficit [Line Items]
Stock Issued During Period, Shares, Issued for Services	5,339,862
Fair Value Of Common Stock For Convertible Accounts	$ 5,900,000
Inducement Expenses	5,251,000	0	35,234,000
Redeemable Shares Number	1,444,788
Temporary Equity, Redemption Value	8,900,000		8,900,000
Stock Issued During Period Shares Exercise of Warrant	721,827
Stock Issued During Period Value Exercise of Warrant	2,700,000
Stock Issued During Period, Value, Issued for Services	4,027,000
Development Stage Entities, Stock Issued, Shares, Issued for Cash	32,000
Development Stage Entities, Stock Issued, Value, Issued for Cash	224,000
Stock Issued During Period, Shares, Conversion of Convertible Securities	200,000
Stock Issued During Period, Value, Conversion of Convertible Securities, Net of Adjustments, Total	70,000
Common Stock [Member]
Shareholders Deficit [Line Items]
Stock Issued During Period, Shares, Issued for Services	5,340,000
Inducement Expenses	2,800,000
Stock Issued During Period, Value, Issued for Services	5,000
Development Stage Entities, Stock Issued, Shares, Issued for Cash	32,000
Development Stage Entities, Stock Issued, Value, Issued for Cash	0
Warrant [Member]
Shareholders Deficit [Line Items]
Inducement Expenses	$ 2,500,000
Conversion Of Accounts Payable To Cognate [Member]
Shareholders Deficit [Line Items]
Stock Issued During Period For Convertible Accounts	1,481,644

XML

Notes Payable (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Notes Payable [Line Items]
Notes payable - current	$ 934		$ 934
Convertible notes payable, net - current	238		288
Convertible notes payable related party, net - current	50		75
Total notes payable, net	1,172		1,222
Notes Payable Current, Unsecured, Issued One [Member]
Notes Payable [Line Items]
Notes payable - current	934	[1]	934	[1]
Convertible Notes Payable Current, Unsecured, Issued One [Member]
Notes Payable [Line Items]
Convertible notes payable, net - current	135	[2]	160	[2]
Convertible Notes Payable Current Unsecured Issued Two [Member]
Notes Payable [Line Items]
Convertible notes payable, net - current	53	[3]	53	[3]
Convertible Notes Payable Related Parties Current Unsecured Issued One [Member]
Notes Payable [Line Items]
Convertible notes payable related party, net - current	$ 50	[4]	$ 75	[4]

[1] This $0.934 million note, which was originally due in July 2011 is currently under dispute with the creditor as to the validity of the note payable balance, which the Company believes has already been paid in full and is not outstanding.

[2] This $0.135 million note as of March 31, 2014 consists of two separate 6% notes in the amounts of $0.110 million and $0.025 million. In regard to the $0.110 million note, the Company has made ongoing attempts to locate the creditor to repay or convert this note, but has been unable to locate the creditor to date. In regard to the $0.025 million note, the holder has elected to convert these notes into equity, the Company has delivered the applicable conversion documents to the holder, and the Company is waiting for the holder to execute and return the documents.

[3] This $0.530 million note is due May 25, 2014.

[4] This $0.050 million demand note as of March 31, 2014 is held by an officer of the Company. The holder has made no demand for payment, and is not expected to make a demand any time in the near term.

XML

Organization and Description of Business and Recent Developments (Details Textual)	3 Months Ended
	Mar. 31, 2014
Lock Up Agreement Description	The Company also entered into a Lock-Up Agreement with Cognate on January 17, 2014, under which Cognate agreed to have all of the shares that are issued as part of the milestone and initiation payments and the invoice conversions under the Cognate Agreements (collectively, the “Lock-Up Shares”) locked up for up to 36 months, in return for 15% warrant coverage for each 6-month period of lock-up, on the same terms as the warrants in the Cognate Agreements. During the lock-up, the Lock-Up Shares may not be sold or traded on the market. These lock-up terms are subject to the same most favored nation treatment as provided in the Cognate Agreements as described above.

XML

Redeemable Common Stock (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Temporary Equity [Line Items]
Temporary Equity, Redemption Value	$ 8.9
Potential Redeemable Shares Eligible	1.4

XML

Liquidity and Financial Condition

3 Months Ended

Mar. 31, 2014

Liquidity [Abstract]

Liquidity [Text Block]

2. Liquidity and Financial Condition

The Company used approximately $10.6 million of cash in its operating activities for the three months ended March 31, 2014 and has used $188.3 million of cash in its operating activities since inception. The Company incurred a $46.0 million aggregate combined cash and non-cash loss for the three months ended March 31, 2014, including $35.4 million of net aggregate non-cash charges associated with stock based compensation, a mark to market charge for the change in the fair value of its derivative liability, and inducement expenses related to the exchange of Cognate BioServices, Inc. (“Cognate”) accounts payable for common stock and warrants.

The Company had cash and cash equivalents of $12.2 million as of March 31, 2014, and current assets less accounts payable and accrued expenses and notes payable of approximately $3.8 million at March 31, 2014. The Company owes an aggregate of $1.1 million of trade liabilities and convertible notes to related parties.

On April 9, 2014, the Company entered into a Securities Purchase Agreement with a single institutional investor for the sale of 2,272,727 shares of common stock at a purchase price of $6.60 per share, for a total purchase price of $15.0 million. Additionally, from the date of the closing until one year after the closing date, the investor has a non-transferable Overallotment Right to purchase up to 2,272,727 additional shares of common stock at a price per share of $7.50, for an additional subscription amount of up to $17.05 million. See Note 11.

Because of recurring operating losses, net operating cash flow deficits, and a deficit accumulated during the development stage, there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

XML

Fair Value Measurements (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance, Opening	$ 8,688
3,174,833 warrants issued during 1st quarter	7,952
Change in fair value of warrant liability	16,984
Balance, Ending	$ 33,624

XML

Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	$ 33,624	$ 8,688
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	0	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	$ 33,624	$ 8,688

XML

Fair Value Measurements (Details 2) (Fair Value, Inputs, Level 3 [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Number of warrants issued	3,175
Fair value of warrants at issuance date	$ 7,952
Quantitative Information One [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrants issuance date	Jan. 06, 2014
Number of warrants issued	139
Fair value of warrants at issuance date	308
Date of valuation	Jan. 06, 2014
Dividend yield (per share)	0.00%
Strike price	$ 4.00
Volatility (annual)	92.13%
Risk-free rate	1.73%
Expected life (years)	5 years
Quantitative Information Two [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrants issuance date	Jan. 17, 2014
Number of warrants issued	2,434
Fair value of warrants at issuance date	5,501
Date of valuation	Jan. 17, 2014
Dividend yield (per share)	0.00%
Strike price	$ 4.00
Volatility (annual)	93.12%
Risk-free rate	1.66%
Expected life (years)	5 years
Quantitative Information Three [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrants issuance date	Jan. 31, 2014
Number of warrants issued	143
Fair value of warrants at issuance date	383
Date of valuation	Jan. 31, 2014
Dividend yield (per share)	0.00%
Strike price	$ 4.00
Volatility (annual)	96.72%
Risk-free rate	1.55%
Expected life (years)	5 years
Quantitative Information Four [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrants issuance date	Feb. 03, 2014
Number of warrants issued	119
Fair value of warrants at issuance date	327
Date of valuation	Feb. 03, 2014
Dividend yield (per share)	0.00%
Strike price	$ 4.00
Volatility (annual)	91.79%
Risk-free rate	1.49%
Expected life (years)	5 years
Quantitative Information Five [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrants issuance date	Feb. 28, 2014
Number of warrants issued	195
Fair value of warrants at issuance date	844
Date of valuation	Feb. 28, 2014
Dividend yield (per share)	0.00%
Strike price	$ 4.00
Volatility (annual)	105.03%
Risk-free rate	1.49%
Expected life (years)	5 years
Quantitative Information Six [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrants issuance date	Mar. 31, 2014
Number of warrants issued	145
Fair value of warrants at issuance date	$ 589
Date of valuation	Mar. 31, 2014
Dividend yield (per share)	0.00%
Risk-free rate	1.73%
Quantitative Information Six [Member] | Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Dividend yield (per share)	6.00%
Volatility (annual)	88.03%
Expected life (years)	4 years 10 months 6 days
Quantitative Information Six [Member] | Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Dividend yield (per share)	2.40%
Volatility (annual)	74.43%
Expected life (years)	4 years 3 months 29 days

XML

Fair Value Measurements (Details Textual) (Fair Value, Inputs, Level 3 [Member])	3 Months Ended
	Mar. 31, 2014
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Class Of Warrant Or Right Reset	3,174,833

XML

Organization and Description of Business and Recent Developments

3 Months Ended

Mar. 31, 2014

Organization, Consolidation and Presentation Of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. Organization and Description of Business and Recent Developments

Northwest Biotherapeutics, Inc. and its wholly owned subsidiaries NW Bio Europe S.A.R.L and NW Bio Gmbh (collectively, the “Company”, “we”, “us” and “our”) were organized to discover and develop innovative immunotherapies for cancer.

The Company’s platform technology, DCVax, is currently being tested for the treatment of certain types of cancers through clinical trials in the United States and Europe that are in various phases. The Company is considered to be a development stage company and, as such, the Company’s financial statements are prepared in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915 “Development Stage Entities.” The Company is subject to all of the risks and uncertainties associated with development stage biotech companies.

Recent Developments

On January 17, 2014, the Company entered into the following agreements (collectively, the “Cognate Agreements” or the “Agreements”) with Cognate BioServices, Inc. (“Cognate”) for manufacturing and related services for our DCVax® products:

⋅ a DCVax®-L Manufacturing and Services Agreement;

⋅ a DCVax®-Direct Manufacturing and Services Agreement;

⋅ an Ancillary Services Agreement; and

  a Manufacturing Expansion Services Agreement.

Together, these Agreements provide for substantial expansion of the manufacturing capacity for the Company’s programs, in multiple regions, as well as development of the necessary systems and logistics, and other near-term and long-term preparations, for large scale scale-up of the Company’s programs. These Agreements include most favored nation treatment with respect to the terms provided to any other investors or creditors (including with respect to any warrants).

The Company also entered into a Lock-Up Agreement with Cognate on January 17, 2014, under which Cognate agreed to have all of the shares that are issued as part of the milestone and initiation payments and the invoice conversions under the Cognate Agreements (collectively, the “Lock-Up Shares”) locked up for up to 36 months, in return for 15% warrant coverage for each 6-month period of lock-up, on the same terms as the warrants in the Cognate Agreements. During the lock-up, the Lock-Up Shares may not be sold or traded on the market. These lock-up terms are subject to the same most favored nation treatment as provided in the Cognate Agreements as described above.

XML

Stock-based Compensation (Details Textual) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended	3 Months Ended
	Jan. 17, 2014	Mar. 31, 2014
Share Based Compensation [Line Items]
Allocated Share-based Compensation Expense		$ 2.5
Stock Issued During Period, Shares, New Issues	5,101,366	8,700,000

XML

Subsequent Events (Details Textual) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended	3 Months Ended
	Apr. 09, 2014	Mar. 31, 2014
Subsequent Event [Line Items]
Proceeds From Debt Securities	$ 15.0
Subsequent Event [Member]
Subsequent Event [Line Items]
Warrant Issued to Purchase Common Stock		113,636
Percentage of Shares Sold to Investors		5.00%
Total Percentage of Price Per Share Sold to Investors		125.00%
Offering Fees		1.05
Warrant Exercise Price		$ 8.25
Subsequent Event [Member] | Non Transferable Overallotment Right [Member]
Subsequent Event [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award	2,272,727
Share-based Compensation Arrangement by Share-based Payment Award, Per Share Weighted Average Price of Shares Purchased	$ 7.50
Payments for Repurchase of Common Stock	17.05
Percentage of Shares Sold to Investors		5.00%
Total Percentage of Price Per Share Sold to Investors		125.00%
Warrant Exercise Price		$ 9.375
Subsequent Event [Member] | single institutional investor [Member]
Subsequent Event [Line Items]
Sale of Stock, Number of Shares Issued in Transaction	2,272,727	2,272,727
Sale of Stock, Price Per Share	$ 6.60
Sale of Stock, Consideration Received on Transaction	$ 15.0

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 12,230	$ 18,499
Prepaid expenses and other current assets	147	147
Total current assets	12,377	18,646
Property and equipment, net	80	83
Other non-current assets	55	55
Total assets	12,512	18,784
Current liabilities:
Accounts payable (includes related party of $1,055 and $3,619 as of March 31, 2014 and December 31, 2013, respectively)	6,620	8,937
Accrued expenses (includes related party of $6 and $5 as of March 31, 2014 and December 31, 2013, respectively)	756	842
Convertible notes, net (includes related party of $50 and $50 as of March 31, 2014 and December 31, 2013, respectively)	238	288
Investor deposit	1,400	0
Notes payable - in dispute	934	934
Derivative liability associated with warrants	33,624	8,688
Total current liabilities	43,572	19,689
Redeemable common stock ($0.001 par value); 0 and 1,444,788 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively	0	8,913
Stockholders' equity (deficit):
Preferred stock ($0.001 par value); 40,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively	0	0
Common stock ($0.001 par value); 450,000,000 shares authorized; 54,818,410 and 45,666,315 shares issued and outstanding as of March 31, 2014 and December 31, 2013 , respectively	55	46
Additional paid-in capital	400,003	375,213
Deficit accumulated during the development stage	(430,928)	(384,887)
Cumulative translation adjustment	(190)	(190)
Total stockholders' equity (deficit)	(31,060)	(9,818)
Total liabilities, redeemable common stock and stockholders' equity (deficit)	$ 12,512	$ 18,784

XML

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $) In Thousands, except Share data	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Translation Adjustment [Member]
Balance at Dec. 31, 2013	$ (9,818)	$ 46	$ 375,213	$ (384,887)	$ (190)
Balance (in shares) at Dec. 31, 2013		45,666,000
Issuance of common stock in exchange for services	4,027	5	4,022	0	0
Issuance of common stock in exchange for services (in shares)	5,339,862	5,340,000
Issuance of common stock for cash	224	0	224	0	0
Issuance of common stock for cash (in shares)	32,000	32,000
Conversion of accounts payable to common stock and warrants	8,727	2	8,725	0	0
Conversion of accounts payable to common stock and warrants (in shares)		1,482,000
Conversion of note payable and accrued interest to common stock	217	0	217	0	0
Conversion of note payable and accrued interest to common stock (in shares)		70,000
Proceeds from warrants exercises	2,692	1	2,691	0	0
Proceeds from warrants exercises (in shares)		722,000
Cashless warrants exercises	0	0	0	0	0
Cashless warrants exercises (in shares)		41,000
Redemption of redeemable securities	8,913	1	8,912	0	0
Redemption of redeemable securities (in shares)		1,445,000
Adjustment for issuance of common stock in 2012	0	0	0	0	0
Adjustment for issuance of common stock in 2012 (in shares)		20,000
Offering costs	(1)	0	(1)	0	0
Net loss	(46,041)	0	0	(46,041)	0
Balance at Mar. 31, 2014	$ (31,060)	$ 55	$ 400,003	$ (430,928)	$ (190)
Balance (in shares) at Mar. 31, 2014		54,818,000

XML

Net Loss Per Share Applicable to Common Stockholders (Details) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Excluded potentially dilutive securities	24,272	13,867
Common stock options [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Excluded potentially dilutive securities	1,551	1,551
Common stock warrants [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Excluded potentially dilutive securities	22,640	12,214
Convertible notes [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Excluded potentially dilutive securities	81	102

XML

Notes Payable (Tables)

3 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

Notes payable consist of the following at March 31, 2014 and December 31, 2013 (in thousands):

	March 31,		December 31,
	2014		2013
Notes payable - current
12% unsecured orginally due July 2011 - in dispute (1)		934		934
		934		934
Convertible notes payable, net - current
6% unsecured (2)		135		160
8% unsecured note due 2014 (3)		53		53
		188		213
Convertible Notes payable related party, net - current
6% due on demand (4)		50		75
		50		75
Total notes payable, net	$	1,172	$	1,222

(1) This $0.934 million note, which was originally due in July 2011 is currently under dispute with the creditor as to the validity of the note payable balance, which the Company believes has already been paid in full and is not outstanding.

(2) This $0.135 million note as of March 31, 2014 consists of two separate 6% notes in the amounts of $0.110 million and $0.025 million. In regard to the $0.110 million note, the Company has made ongoing attempts to locate the creditor to repay or convert this note, but has been unable to locate the creditor to date. In regard to the $0.025 million note, the holder has elected to convert these notes into equity, the Company has delivered the applicable conversion documents to the holder, and the Company is waiting for the holder to execute and return the documents.

(3) This $0.530 million note is due May 25, 2014.

(4) This $0.050 million demand note as of March 31, 2014 is held by an officer of the Company. The holder has made no demand for payment, and is not expected to make a demand any time in the near term.

XML

Related Party Transactions (Details Textual) (USD $)	1 Months Ended	3 Months Ended		12 Months Ended	216 Months Ended
	Jan. 17, 2014	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013	Mar. 31, 2014
Related Party Transaction [Line Items]
Research and Development Arrangement, Contract to Perform for Others, Costs Incurred, Gross		$ 1,000,000		$ 3,600,000
One Time Charges Of Service Agreement		10,100,000
Research and Development Expense Service Agreement		5,500,000
Debt Conversion, Converted Instrument, Amount		100,000	900,000
Debt Conversion, Converted Instrument, Shares Issued (in shares)		70,000	400,000
Percentage Of Warrants Coverage		50.00%
Fair Value Of Warrants		2,500,000
Stock Issued During Period, Shares, New Issues	5,101,366	8,700,000
Inducement Expenses		5,251,000	0		35,234,000
Warrant [Member]
Related Party Transaction [Line Items]
Inducement Expenses		2,500,000
Cognate Bioservices [Member]
Related Party Transaction [Line Items]
Debt Conversion, Converted Instrument, Amount		5,900,000
Debt Conversion, Converted Instrument, Shares Issued (in shares)		1,500,000
Cash Consideration Per Share (in dollars per share)		$ 4.00
Warrant Issued to Purchase Common Stock		0.7
Warrant Exercise Price		$ 4.00
Debt Instrument, Convertible, Conversion Price		$ 4.00			$ 4.00
Cognate Bioservices [Member] | Condition Two [Member]
Related Party Transaction [Line Items]
Contingent Liability DCVax-L Manufacturing Services Agreement Amount	3,000,000
Cognate Bioservices [Member] | Condition Three [Member]
Related Party Transaction [Line Items]
Contingent Liability DCVax-L Manufacturing Services Agreement Amount	$ 5,000,000

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Stockholders' Deficit (Tables)

3 Months Ended

Mar. 31, 2014

Stockholders' Equity Note [Abstract]

Schedule Of Warrant Activity [Table Text Block]

The following is a summary of warrant activity for the three months ended March 31, 2014 (in thousands):

	Number of		Weighted Average
	Warrants		Exercise Price
Outstanding as of December 31, 2013		20,266	$	5.23
Warrants issued in connection with conversion of Cognate accounts payable*		741		4.00
Warrants issued in exchange for services		2,434		4.00
Warrants exercised on a cashless basis		(73)		-
Warrants exercised for cash		(722)		3.66
Expired in first quarter of 2014		(6)		9.54
Outstanding as of March 31, 2014		22,640	$	5.12

*The warrants contain “down round protection” and the Company classifies these warrant instruments as liabilities at fair value and remeasures these instruments to fair value each reporting period. The Company recorded a $2.5 million charge to inducement expense related to these warrants. The fair value of the warrants was based upon a Monte Carlo Simulation as more fully discussed in Note 4.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended		216 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
Cash Flows from Operating Activities:
Net Loss	$ (46,041)	$ (14,394)	$ (386,119)
Reconciliation of net loss to net cash used in operating activities:
Depreciation and amortization	3	3	2,391
Amortization of deferred financing costs	0	0	320
Amortization of debt discount and accretion on redeemable securities	0	368	44,776
Change in fair value of derivatives	16,984	0	14,444
Accrued interest converted to common stock	76	0	336
Accreted interest on convertible promissory note	0	0	1,484
Stock-based compensation costs	0	609	24,412
Stock and warrants issued for services	9,528	883	35,823
Inducement expense	5,251	0	35,234
Valuation of reclassified equity contracts	0	0	(16,071)
Asset impairment loss and gain on sale of properties	0	0	(936)
Loss on facility sublease	0	0	895
Increase (decrease) in cash resulting from changes in assets and liabilities:
Prepaid expenses and other current assets	0	73	563
Accounts payable and accrued expenses	277	299	8,766
Related party accounts payable and accrued expenses	3,363	5,085	45,261
Deposits and other non-current assets	0	0	(39)
Accrued loss on sublease	0	0	(265)
Deferred rent	0	0	411
Net Cash used in Operating Activities	(10,559)	(7,074)	(188,314)
Cash Flows from Investing Activities:
Purchase of property and equipment, net	0	0	(5,123)
Proceeds from sale of property and equipment	0	0	258
Proceeds from sale of intellectual property	0	0	1,816
Proceeds from sale of marketable securities	0	0	2,000
Refund of security deposit	0	0	(3)
Transfer of restricted cash	0	0	(1,035)
Net Cash used in Investing Activities	0	0	(2,087)
Cash Flows from Financing Activities:
Proceeds from issuance of redeemable securities	0	0	5,302
Repayment on redeemable securities	0	0	(240)
Proceeds from Investor deposit	1,400	0	1,400
Proceeds from issuance of notes payable	0	400	7,980
Proceeds from issuance of convertible notes payable	0	0	38,414
Proceeds from issuance of notes payable to related parties	0	0	12,880
Repayment of note payable to related parties	0	0	(9,655)
Repayment of convertible promissory note	(25)	0	(3,786)
Borrowing under line of credit, Northwest Hospital	0	0	2,834
Repayment of line of credit, Northwest Hospital	0	0	(2,834)
Payment on capital lease obligations	0	0	(323)
Payments on note payable	0	(289)	(420)
Proceeds from issuance preferred stock, net	0	0	28,708
Proceeds from exercise of stock options and warrants	2,692	0	3,515
Proceeds from issuance common stock and warrants, net	224	0	126,182
Proceeds from sale of stock warrant	0	0	90
Payment of preferred stock dividends	0	0	(1,251)
Series A preferred stock redemption fee	0	0	(1,700)
Deferred financing costs	(1)	(10)	(4,275)
Net Cash provided by Financing Activities	4,290	101	202,821
Effect of exchange rates on cash and cash equivalents	0	0	(190)
Net increase (decrease) in cash and cash equivalents	(6,269)	(6,973)	12,230
Cash and cash equivalents at beginning of period	18,499	7,346	0
Cash and cash equivalent at end of period	12,230	373	12,230
Supplemental disclosure of cash flow information - Cash paid during the period for interest	0	0	1,879
Supplemental schedule of non-cash financing activities:
Equipment acquired through capital leases	0	0	285
Issuance of common stock in connection with elimination of Series A and Series A-1 preferred stock preferences	0	0	12,349
Issuance of common stock in connection with conversion of notes payable and accrued expenses	140	0	62,192
Issuance of common stock and warrants in connection with conversion of accounts payable	5,926	0	22,894
Issuance of redeemable common stock in connection with conversion of liabilities	0	934	3,673
Warrants issued on Series A and Series A-1 preferred stock dividends	0	0	4,664
Reclass of redeemable security to equity	8,913	0	10,777
Reclass of warrants to warrant liability	0	0	217
Warrant liability recorded in connection with issuance of common stock	0	0	5,602
Liability for reclassified equity contracts	0		41,253
Accretion of mandatorily redeemable Series A preferred stock redemption obligation	0	0	1,872
Debt discount on promissory notes	0		27,414
Issuance of Series C preferred stock warrants in connection with lease agreement	0	0	43
Issuance of common stock to settle accounts payable	0	0	4
Liability for and issuance of common stock and warrants to Medarex	0	0	840
Issuance of common stock to landlord	0	0	35
Deferred compensation on issuance of stock options and restricted stock grants	0	0	759
Cancellation of options and restricted stock	0	0	849
Financing of prepaid insurance through note payable	0	0	491
Stock subscription receivable	0	0	480
Conversion of debt to accounts payable	0		1,428
Conversion of convertible promissory notes and accrued interest to stock	0	0	269
Series A Preferred Stock [Member]
Supplemental schedule of non-cash financing activities:
Modification of preferred stock warrants	0	0	2,306
Series A 1 Preferred Stock [Member]
Supplemental schedule of non-cash financing activities:
Modification of preferred stock warrants	0	0	16,393
Conversion of convertible promissory notes and accrued interest to stock	0	0	7,707
Series D Preferred Stock [Member]
Supplemental schedule of non-cash financing activities:
Conversion of convertible promissory notes and accrued interest to stock	$ 0	$ 0	$ 5,324

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CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Accounts payable, related party (in dollars)	$ 1,055	$ 3,619
Accrued expenses, related party net (in dollars)	6	5
Convertible notes payable current related parties, net (in dollars)	$ 50	$ 50
Temporary equity, par or stated value per share (in dollars per share)	$ 0.001	$ 0.001
Temporary Equity, Shares Issued	0	1,444,788
Temporary Equity, Shares Outstanding	0	1,444,788
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	40,000,000	40,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	450,000,000	450,000,000
Common stock, shares issued	54,818,410	45,666,315
Common stock, shares outstanding	54,818,410	45,666,315

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Stockholders' Deficit

3 Months Ended

Mar. 31, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

10. Stockholders’ Deficit

a. Common Stock Issuances

First Quarter 2014

During the quarter ended March 31, 2014 the Company issued in aggregate 5,339,862 shares of common stock in exchange for consulting services. In accordance with ASC Topic 718, the fair value of the vested portion of the common stock was recognized as $4.0 million.

During the quarter ended March 31, 2014 the Company issued in aggregate 32,000 shares of common stock for cash. The fair value of the common stock recognized was $0.2 million.

During the quarter ended March 31, 2014, the Company converted accounts payable due to Cognate of approximately $5.9 million into 1,481,644 shares. The Company recorded $2.8 million of inducement expense associated with the issuance of the common shares. In addition, as noted in footnote 10b the Company issued warrants that were valued at $2.5 million at the date of issuance related to the conversion of accounts payable. Total inducement charge was $5.3 million.

During the quarter ended March 31, 2014, the Company converted notes and relevant accrued interest, based upon the original terms, of $0.2 million into approximately 0.07 million shares of common stock.

During the quarter ended March 31, 2014, the Company issued an aggregate of 721,827 shares of common stock from the exercise of warrants previously issued. The Company received proceeds of approximately $2.7 million from the exercise of these warrants.

During the quarter ended March 31, 2014, 1,444,788 redeemable shares with a carrying value of $8.9 million were no longer redeemable and were reclassed to stockholders’ equity.

b. Stock Purchase Warrants

The following is a summary of warrant activity for the three months ended March 31, 2014 (in thousands):

	Number of		Weighted Average
	Warrants		Exercise Price
Outstanding as of December 31, 2013		20,266	$	5.23
Warrants issued in connection with conversion of Cognate accounts payable*		741		4.00
Warrants issued in exchange for services		2,434		4.00
Warrants exercised on a cashless basis		(73)		-
Warrants exercised for cash		(722)		3.66
Expired in first quarter of 2014		(6)		9.54
Outstanding as of March 31, 2014		22,640	$	5.12

*The warrants contain “down round protection” and the Company classifies these warrant instruments as liabilities at fair value and remeasures these instruments to fair value each reporting period. The Company recorded a $2.5 million charge to inducement expense related to these warrants. The fair value of the warrants was based upon a Monte Carlo Simulation as more fully discussed in Note 4.

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Document And Entity Information	3 Months Ended
	Mar. 31, 2014	May 14, 2014
Document Information [Line Items]
Entity Registrant Name	NORTHWEST BIOTHERAPEUTICS INC
Entity Central Index Key	0001072379
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	NWBO
Entity Common Stock, Shares Outstanding		57,195,817
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2014
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2014

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Subsequent Events

3 Months Ended

Mar. 31, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

11. Subsequent Events

Securities Purchase Agreement - $15.0 million in procceds

On April 15, 2014, the Company sold to a single institutional investor 2,272,727 shares of common stock at a purchase price of $6.60 per share, for a total purchase price of $15.0 million. Additionally, from the date of the closing until one year after the closing date, the investor has a non-transferable Overallotment Right to purchase up to 2,272,727 additional shares of common stock at a price per share of $7.50, for an additional subscription amount of up to $17.05 million. In connection with the sale, the Company paid H.C. Wainwright, the sole placement agent in the offering, fees of approximately $1.05 million, and issued to H.C. Wainwright a warrant to purchase 113,636 shares, which was equal to 5% of the shares sold to the investor in the financing, with an exercise price of $8.25 (which is equal to 125% of the price per share for the shares sold to the investor).

If the investor exercises any portion of the Overallotment Right, the Company will issue to H.C. Wainwright a warrant to purchase shares in an amount equal to 5% of the shares purchased by the investor, with an exercise price of $9.375 (equal to 125% of the price per share for the Overallotment Right shares, if any). The warrants will be exercisable until February 5, 2018.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		216 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
Revenues:
Research material sales	$ 0	$ 0	$ 580
Contract research and development from related parties	0	0	1,128
Research grants and other	0	137	2,642
Total revenues	0	137	4,350
Operating costs and expenses:
Cost of research material sales	0	0	382
Research and development	19,986	11,608	183,064
General and administration	3,693	2,470	107,056
Depreciation and amortization	3	3	2,392
Loss on facility sublease	0	0	895
Asset impairment loss	0	0	2,445
Total operating costs and expenses	23,682	14,081	296,234
Loss from operations	(23,682)	(13,944)	(291,884)
Other income (expense):
Valuation of reclassified equity instruments	0	0	16,071
Inducement expense	(5,251)	0	(43,187)
Accretion of redeemable securities	0	0	(2,073)
Change in fair value of derivatives	(16,984)	0	(14,444)
Gain on sale of intellectual property and property and equipment	0	0	3,664
Foreign exchange gain or loss	(2)	0	(3)
Interest expense	(122)	(450)	(55,970)
Interest income and other	0	0	1,707
Net loss	(46,041)	(14,394)	(386,119)
Issuance of common stock in connection with elimination of Series A and Series A-1 preferred stock preferences	0	0	(12,349)
Warrants issued on Series A and Series A-1 preferred stock dividends	0	0	(4,664)
Accretion of Series A preferred stock mandatory redemption obligation	0	0	(1,872)
Series A preferred stock redemption fee	0	0	(1,700)
Beneficial conversion feature of Series D preferred stock	0	0	(4,274)
Net loss applicable to common stockholders	(46,041)	(14,394)	(430,928)
Net loss per share applicable to common stockholders - basic (in dollars per share)	$ (0.88)	$ (0.54)
Weighted average shares used in computing basic loss per share (in shares)	52,377	26,710
Series A Preferred Stock [Member]
Other income (expense):
Modification of preferred stock warrants	0	0	(2,306)
Preferred stock dividends	0	0	(334)
Series A 1 Preferred Stock [Member]
Other income (expense):
Modification of preferred stock warrants	0	0	(16,393)
Preferred stock dividends	$ 0	$ 0	$ (917)

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Stock-based Compensation

3 Months Ended

Mar. 31, 2014

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

5.          Stock-based Compensation

Stock Based Compensation to Non-employees

Stock-based compensation expense related to stock-based awards to non-employees is recognized as the stock-based awards are earned, generally through the provision of services. The Company believes that the fair value of the stock-based awards is more reliably measurable than the fair value of the services received. The fair value of the granted stock-based awards is calculated at each reporting date. On January 17, 2014, in connection with the Cognate Agreements, the Company issued 5,101,366 shares of common stock. The common stock will vest over thirty six months from the closing date. Stock-based compensation expense related to non-employee grants was $2.5 million for the three months ended March 31, 2014 and is anticipated to be a similar amount for each calendar quarter over the next three years.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

4. Fair Value Measurements

The following table classifies the Company’s liabilities measured at fair value on a recurring basis (primarily reflecting an increase in stock price per share) into the fair value as of March 31, 2014 and December 31, 2013 (in thousands):

	Fair value measured at March 31, 2014
	Total carrying		Quoted prices in active		Significant other		Significant
	value at March 31,		markets		observable inputs		unobservable inputs
	2014		(Level 1)		(Level 2)		(Level 3)
Warrant liability	$	33,624	$	-	$	-	$	33,624

	Fair value measured at December 31, 2013
	Total carrying		Quoted prices in active		Significant other		Significant
	value at December 31,		markets		observable inputs		unobservable inputs
	2013		(Level 1)		(Level 2)		(Level 3)
Warrant liability	$	8,688	$	-	$	-	$	8,688

There were no transfers between Level 1, 2 or 3 during the three months ended March 31, 2014.

The following table presents changes in Level 3 liabilities measured at fair value from the period ended December 31, 2013 through March 31, 2014. Both observable and unobservable inputs are used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category  include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs.

Balance – December 31, 2013	$	8,688
3,174,833 warrants issued during 1st quarter		7,952
Change in fair value of warrant liability		16,984
Balance – March 31, 2014	$	33,624

The Company’s warrant liabilities are measured at fair value using the Monte Carlo simulation valuation methodology. A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities that are categorized within Level 3 of the fair value hierarchy for the three months ended March 31, 2014 is as follows (dollars and shares in thousands):

Warrants issuance date	January 6, 2014		January 17, 2014		January 31, 2014		February 3, 2014		February 28, 2014		March 31, 2014		Total
Number of warrants issued		139		2,434		143		119		195		145		3,175
Fair value of warrants at issuance date	$	308	$	5,501	$	383	$	327	$	844	$	589	$	7,952

Date of valuation	January 6, 2014			January 17, 2014			January 31, 2014			February 3, 2014			February 28, 2014			March 31, 2014
Dividend yield (per share)		0	%		0	%		0	%		0	%		0	%		0	%
Strike price	$	4.00		$	4.00		$	4.00		$	4.00		$	4.00			$2.40 - $6.00
Volatility (annual)		92.13	%		93.12	%		96.72	%		91.79	%		105.03	%		74.43%-88.03%
Risk-free rate		1.73	%		1.66	%		1.55	%		1.49	%		1.49	%		1.73	%
Expected life (years)		5.0			5.0			5.00			5.00			5.00			4.33-4.85

The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s Management.

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Net Loss Per Share Applicable to Common Stockholders (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

The following securities were not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented (in thousands):

	For the three months ended
	March 31,
	2014		2013
Common stock options		1,551		1,551
Common stock warrants		22,640		12,214
Convertible notes		81		102
Excluded potentially dilutive securities		24,272		13,867

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Reclassified Equity Contracts

3 Months Ended

Mar. 31, 2014

Reclassified Equity Contracts [Abstract]

Reclassified Equity Contracts Disclosure [Text Block]

8. Related Party Transactions

a. Cognate BioServices

Under the January 17, 2014 DCVax®-L Manufacturing Services Agreement and the DCVax-Direct Agreement, a modified set of provisions applies going forward to any shut down or suspension.  Such shut down provisions have been included in all of the agreements with Cognate since 2005. Under the modified provisions, if the Company shuts down or suspends its DCVax-L program or DCVax-Direct program with Cognate in breach of the Agreement, the Company will be liable for certain fees in addition to any other remedies. The fees are based on the stage at which the shut down or suspension occurs:

• Prior to the last dose of the last patient enrolled in the Phase III trial for DCVax®-L or after the last dose of the last patient enrolled in the Phase III clinical trial for DCVax®-L but before any submission for product approval in any jurisdiction or after the submission of any application for market authorization but prior to receiving a marketing authorization approval: in any of these cases, the fee shall be $3 million.

• At any time after receiving the equivalent of a marketing authorization for DCVax®-L in any jurisdiction, the fee shall be $5 million.

For the three months ended March 31, 2014 the Company recognized approximately $10.1 million was associated with one-time charges (including charges relating to start-up and substantial expansion of several Company programs) under the 2014 service agreements. In addition, the Company incurred recurring research and development charges, which, for the three months ended March 31, 2014 were $5.5 million. As of March 31, 2014 and December 31, 2013, the Company owed Cognate (including third party sub-contract amounts) approximately $1.0 million and $3.6 million, respectively.

Cognate Accounts Payable Conversions and inducement charge –First quarter 2014

Under the July 2013 Conversion and Lock-up Agreement $5.9 million in accounts payable due to Cognate was converted into common stock and warrants. 1.5 million shares of common stock were issued based on a $4.00 per share conversion price. 50% warrant coverage of the common stock issued resulted in 0.7 million warrants issued with an initial exercise price of $4.00. The shares and warrants are subject to most favored nation treatment with respect to the terms provided to any other investors or creditors subsequent to their issuance (including with respect to any warrants).

In accordance with ASC Topic 820, the fair value of the shares was recognized as approximately $8.7 million . The fair value of the warrants was based on the Monte Carlo simulation model, the inputs of which are disclosed in note 4 and was approximately $2.5 million. The Company recorded a $5.3 million of inducement expense in connection with these transactions.

The conversion shares are subject to a lock-up period of at least 18 months from the date of their issuance. Under the lock-up, the shares cannot be sold or traded on the market.

The Company classified the warrants as liabilities at their fair value and adjusts the instruments to fair value at each reporting period in the condensed consolidated statements of operations.

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Related Party Transactions

3 Months Ended

Mar. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

8. Related Party Transactions

a. Cognate BioServices

Under the January 17, 2014 DCVax®-L Manufacturing Services Agreement and the DCVax-Direct Agreement, a modified set of provisions applies going forward to any shut down or suspension.  Such shut down provisions have been included in all of the agreements with Cognate since 2005. Under the modified provisions, if the Company shuts down or suspends its DCVax-L program or DCVax-Direct program with Cognate in breach of the Agreement, the Company will be liable for certain fees in addition to any other remedies. The fees are based on the stage at which the shut down or suspension occurs:

• Prior to the last dose of the last patient enrolled in the Phase III trial for DCVax®-L or after the last dose of the last patient enrolled in the Phase III clinical trial for DCVax®-L but before any submission for product approval in any jurisdiction or after the submission of any application for market authorization but prior to receiving a marketing authorization approval: in any of these cases, the fee shall be $3 million.

• At any time after receiving the equivalent of a marketing authorization for DCVax®-L in any jurisdiction, the fee shall be $5 million.

For the three months ended March 31, 2014 the Company recognized approximately $10.1 million was associated with one-time charges (including charges relating to start-up and substantial expansion of several Company programs) under the 2014 service agreements. In addition, the Company incurred recurring research and development charges, which, for the three months ended March 31, 2014 were $5.5 million. As of March 31, 2014 and December 31, 2013, the Company owed Cognate (including third party sub-contract amounts) approximately $1.0 million and $3.6 million, respectively.

Cognate Accounts Payable Conversions and inducement charge –First quarter 2014

Under the July 2013 Conversion and Lock-up Agreement $5.9 million in accounts payable due to Cognate was converted into common stock and warrants. 1.5 million shares of common stock were issued based on a $4.00 per share conversion price. 50% warrant coverage of the common stock issued resulted in 0.7 million warrants issued with an initial exercise price of $4.00. The shares and warrants are subject to most favored nation treatment with respect to the terms provided to any other investors or creditors subsequent to their issuance (including with respect to any warrants).

In accordance with ASC Topic 820, the fair value of the shares was recognized as approximately $8.7 million . The fair value of the warrants was based on the Monte Carlo simulation model, the inputs of which are disclosed in note 4 and was approximately $2.5 million. The Company recorded a $5.3 million of inducement expense in connection with these transactions.

The conversion shares are subject to a lock-up period of at least 18 months from the date of their issuance. Under the lock-up, the shares cannot be sold or traded on the market.

The Company classified the warrants as liabilities at their fair value and adjusts the instruments to fair value at each reporting period in the condensed consolidated statements of operations.

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Notes Payable

3 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

6.           Notes Payable

During the three months ended March 31, 2014, the Company converted notes and relevant accrued interest of $0.1 million into approximately 0.07 million shares of common stock. During the three months ended March 31, 2013, $0.9 million of notes were converted into 0.4 million shares of common stock.

Notes payable consist of the following at March 31, 2014 and December 31, 2013 (in thousands):

	March 31,		December 31,
	2014		2013
Notes payable - current
12% unsecured orginally due July 2011 - in dispute (1)		934		934
		934		934
Convertible notes payable, net - current
6% unsecured (2)		135		160
8% unsecured note due 2014 (3)		53		53
		188		213
Convertible Notes payable related party, net - current
6% due on demand (4)		50		75
		50		75
Total notes payable, net	$	1,172	$	1,222

(1) This $0.934 million note, which was originally due in July 2011 is currently under dispute with the creditor as to the validity of the note payable balance, which the Company believes has already been paid in full and is not outstanding.

(2) This $0.135 million note as of March 31, 2014 consists of two separate 6% notes in the amounts of $0.110 million and $0.025 million. In regard to the $0.110 million note, the Company has made ongoing attempts to locate the creditor to repay or convert this note, but has been unable to locate the creditor to date. In regard to the $0.025 million note, the holder has elected to convert these notes into equity, the Company has delivered the applicable conversion documents to the holder, and the Company is waiting for the holder to execute and return the documents.

(3) This $0.530 million note is due May 25, 2014.

(4) This $0.050 million demand note as of March 31, 2014 is held by an officer of the Company. The holder has made no demand for payment, and is not expected to make a demand any time in the near term.

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Net Loss Per Share Applicable to Common Stockholders

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

7. Net Loss Per Share Applicable to Common Stockholders

Options, warrants, and convertible debt outstanding were all considered anti-dilutive for the three months ended March 31, 2014, and 2013, due to net losses.

The following securities were not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented (in thousands):

	For the three months ended
	March 31,
	2014		2013
Common stock options		1,551		1,551
Common stock warrants		22,640		12,214
Convertible notes		81		102
Excluded potentially dilutive securities		24,272		13,867

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Redeemable Common Stock

3 Months Ended

Mar. 31, 2014

Equity [Abstract]

Redeemable Common Stock Disclosure [Text Block]

9. Redeemable Common Stock

During the first quarter of 2014, the redemption provision on all 1.4 million redeemable shares outstanding as of December 31, 2013 lapsed and $ 8.9 million was transferred from redeemable common stock to stockholders’ equity (deficit).

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Notes Payable (Details Textual) (USD $) Share data in Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Notes Payable [Line Items]
Debt Conversion, Converted Instrument, Amount	$ 100,000	$ 900,000
Debt Conversion, Converted Instrument, Shares Issued	0.07	0.40
Note One	110,000
Note Two	$ 25,000
Notes Payable Current, Unsecured, Issued One [Member]
Notes Payable [Line Items]
Debt Instrument, Maturity Date	Jul. 31, 2011
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Convertible Notes Payable Current, Unsecured, Issued One [Member]
Notes Payable [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	6.00%
Convertible Notes Payable Current Unsecured Issued Two [Member]
Notes Payable [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	8.00%
Convertible Notes Payable Related Parties Current Unsecured Issued One [Member]
Notes Payable [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	6.00%

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following table classifies the Company’s liabilities measured at fair value on a recurring basis (primarily reflecting an increase in stock price per share) into the fair value as of March 31, 2014 and December 31, 2013 (in thousands):

	Fair value measured at March 31, 2014
	Total carrying		Quoted prices in active		Significant other		Significant
	value at March 31,		markets		observable inputs		unobservable inputs
	2014		(Level 1)		(Level 2)		(Level 3)
Warrant liability	$	33,624	$	-	$	-	$	33,624

	Fair value measured at December 31, 2013
	Total carrying		Quoted prices in active		Significant other		Significant
	value at December 31,		markets		observable inputs		unobservable inputs
	2013		(Level 1)		(Level 2)		(Level 3)
Warrant liability	$	8,688	$	-	$	-	$	8,688

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]

The following table presents changes in Level 3 liabilities measured at fair value from the period ended December 31, 2013 through March 31, 2014. Both observable and unobservable inputs are used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category  include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs.

Balance – December 31, 2013	$	8,688
3,174,833 warrants issued during 1st quarter		7,952
Change in fair value of warrant liability		16,984
Balance – March 31, 2014	$	33,624

Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis [Table Text Block]

The Company’s warrant liabilities are measured at fair value using the Monte Carlo simulation valuation methodology. A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities that are categorized within Level 3 of the fair value hierarchy for the three months ended March 31, 2014 is as follows (dollars and shares in thousands):

Warrants issuance date	January 6, 2014		January 17, 2014		January 31, 2014		February 3, 2014		February 28, 2014		March 31, 2014		Total
Number of warrants issued		139		2,434		143		119		195		145		3,175
Fair value of warrants at issuance date	$	308	$	5,501	$	383	$	327	$	844	$	589	$	7,952

Date of valuation	January 6, 2014			January 17, 2014			January 31, 2014			February 3, 2014			February 28, 2014			March 31, 2014
Dividend yield (per share)		0	%		0	%		0	%		0	%		0	%		0	%
Strike price	$	4.00		$	4.00		$	4.00		$	4.00		$	4.00			$2.40 - $6.00
Volatility (annual)		92.13	%		93.12	%		96.72	%		91.79	%		105.03	%		74.43%-88.03%
Risk-free rate		1.73	%		1.66	%		1.55	%		1.49	%		1.49	%		1.73	%
Expected life (years)		5.0			5.0			5.00			5.00			5.00			4.33-4.85

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Liquidity and Financial Condition (Details Textual) (USD $)	3 Months Ended		216 Months Ended	0 Months Ended	3 Months Ended	0 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Apr. 09, 2014 Subsequent Event [Member] Single Institutional Investor [Member]	Mar. 31, 2014 Subsequent Event [Member] Single Institutional Investor [Member]	Apr. 09, 2014 Subsequent Event [Member] Non Transferable Overallotment Right [Member]
Liquidity and Financial Condition [Line Items]
Net Cash Provided By (Used In) Operating Activities	$ (10,559,000)	$ (7,074,000)	$ (188,314,000)
Share Based Compensation Aggregate Non Cash Charges For The Non Cash Interest Associated With The Accretion Of Our Convertible Notes Discount Net	35,400,000
Cash Equivalents, at Carrying Value	12,200,000		12,200,000
Current Assets Less Payables	3,800,000		3,800,000
Convertible Notes Payable Related Parties	1,100,000		1,100,000
Cash and Noncash Loss	46,000,000
Payments for Repurchase of Common Stock						17,050,000
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award						2,272,727
Share-based Compensation Arrangement by Share-based Payment Award, Per Share Weighted Average Price of Shares Purchased (in dollars per share)						$ 7.50
Sale of Stock, Price (in dollars per share)				$ 6.60
Sale of Stock, Consideration Received on Transaction				$ 15,000,000
Sale of Stock, Number of Shares Issued in Transaction				2,272,727	2,272,727

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) In Thousands, unless otherwise specified	3 Months Ended		216 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
Net loss	$ (46,041)	$ (14,394)	$ (386,119)
Other comprehensive loss
Foreign currency translation adjustment	0	0	(190)
Total comprehensive loss	$ (46,041)	$ (14,394)	$ (386,309)

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

3.        Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated.

The accompanying unaudited condensed financial statements as of March 31, 2014 and for the three months then ended have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements. The condensed consolidated balance sheet as of March 31, 2014, condensed consolidated statements of operations and condensed consolidated statements of comprehensive loss for the three months ended March 31, 2014 and 2013, condensed consolidated statement of stockholders’ equity (deficit) for the three months ended March 31, 2014, and the condensed consolidated statements of cash flows for the three months ended March 31, 2014 and 2013 and period from March 18, 1996 (inception) to March 31, 2014 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for the three months ended March 31, 2014 are not necessarily indicative of results to be expected for the year ending December 31, 2014 or for any future interim period. The condensed balance sheet at December 31, 2013 has been derived from audited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2013, and notes thereto included in the Company’s annual report on Form 10-K, which was filed with the SEC on April 1, 2014.

Use of Estimates

In preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include valuing equity securities in share-based payment arrangements, estimating the fair value of equity instruments recorded as derivative liabilities, and estimating the useful lives of depreciable assets and whether impairment charges may apply.

Research and Development Costs

Research and development costs are charged to operations as incurred and consist primarily of clinical trial costs, related party manufacturing cost, consulting costs, contract research and development costs, and compensation costs. For the three months ended March 31, 2014 and 2013 the Company recognized $20.0 million and $11.6 million, respectively, of research and development costs (cash and non-cash combined).

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2013 Annual Report.

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Summary of Significant Accounting Policies (Details Textual) (USD $) In Thousands, unless otherwise specified	3 Months Ended		216 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
Summary of Significant Accounting Policies [Line Items]
Research and Development Expense	$ 19,986	$ 11,608	$ 183,064

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Stockholders' Deficit (Details)	3 Months Ended
	Mar. 31, 2014
Shareholders Deficit [Line Items]
Number of Warrants - Outstanding	20,266
Number Of Warrants - Warrants issued for service	2,434
Number of Warrants - warrants issued in connection with conversion of Cognate accounts payable	741	[1]
Number Of Warrants Warrants - Exercised On Cashless Basis	(73)
Number of Warrants - Expired	(6)
Number of Warrants - Outstanding	22,640
Weighted Average Exercise Price - Outstanding	5.23
Weighted Average Exercise Price - warrants issued in exchange for services	4.00
Weighted Average Exercise Price - warrants issued in connection with conversion of Cognate accounts payable	4.00	[1]
Weighted Average Exercise Price - Expired	9.54
Weighted Average Exercise Price - Outstanding	5.12
Number Of Warrants Warrants - Exercised For Cash	(722)
Weighted average exercise Price - Warrants exercised on a cashless basis	0
Weighted Average Exercise Price - exercised for cash	3.66

[1] The warrants contain “down round protection” and the Company classifies these warrant instruments as liabilities at fair value and remeasures these instruments to fair value each reporting period. The Company recorded a $2.5 million charge to inducement expense related to these warrants. The fair value of the warrants was based upon a Monte Carlo Simulation as more fully discussed in Note 4.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated.

The accompanying unaudited condensed financial statements as of March 31, 2014 and for the three months then ended have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements. The condensed consolidated balance sheet as of March 31, 2014, condensed consolidated statements of operations and condensed consolidated statements of comprehensive loss for the three months ended March 31, 2014 and 2013, condensed consolidated statement of stockholders’ equity (deficit) for the three months ended March 31, 2014, and the condensed consolidated statements of cash flows for the three months ended March 31, 2014 and 2013 and period from March 18, 1996 (inception) to March 31, 2014 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for the three months ended March 31, 2014 are not necessarily indicative of results to be expected for the year ending December 31, 2014 or for any future interim period. The condensed balance sheet at December 31, 2013 has been derived from audited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2013, and notes thereto included in the Company’s annual report on Form 10-K, which was filed with the SEC on April 1, 2014.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

In preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include valuing equity securities in share-based payment arrangements, estimating the fair value of equity instruments recorded as derivative liabilities, and estimating the useful lives of depreciable assets and whether impairment charges may apply.

Research and Development Expense, Policy [Policy Text Block]

Research and Development Costs

Research and development costs are charged to operations as incurred and consist primarily of clinical trial costs, related party manufacturing cost, consulting costs, contract research and development costs, and compensation costs. For the three months ended March 31, 2014 and 2013 the Company recognized $20.0 million and $11.6 million, respectively, of research and development costs (cash and non-cash combined).

Significant Accounting Policies [Policy Text Block]

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2013 Annual Report.