In Re Northwest Biotherapeutics Inc. Securities Litigation 07-CV …securities.stanford.edu/filings-documents/1037/NWBO_01/... · 2008-08-26 · 22 Ln - 22 Ln - - Ln cv a o o r r

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The Honorable Richard A. Jones

UNITED STATES DISTRICT COURT, WESTERN DISTRICT OF WASHINGTONAT SEATTLE

In re NORTHWEST BIOTHERAPEUTICSINC. SECURITIES LITIGATION

This Document Relates To:

Master File No. C07 -1254-RAJ

CONSOLIDATED SECOND AMENDEDCOMPLAINT FOR VIOLATION OFTHE FEDERAL SECURITIES LAWS

CLASS ACTIONALL ACTIONS

1. SUMMARY AND OVERVIEW

1. Lead Plaintiff alleges the following based upon the investigation of Lead

Plaintiff's counsel. The investigation included a review of United States Securities and

Exchange Commission ("SEC ) filings by Northwest Biotherapeutics, Inc. ("Northwest

Biotherapeutics, "NWBO or the "Company ), regulatory filings and reports, securities

analysts' reports, public statements issued by the Company, and media reports.

II. NATURE OF THE ACTION

2. This is a securities class action on behalf of purchasers of the securities ofNWBO

between April 17, 2007 and July 18, 2007, inclusive (the "Class Period ), seeking to pursue

remedies under the Securities Exchange Act of 1934 (the "Exchange Act ). During that period

Defendants badly needed cash to continue to operate and to restructure loans with one of its

primary lenders, Toucan Partners. In order to attract the additional cash and funding from new

CONSOLIDATED SECOND AMENDED COMPLAINT FORVIOLATION OF THE FEDERAL SECURITIES LAWS - 1Case No. 07-cv-1254 RAJ

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private investors, Defendants issued false statements about NWBO's progress commercializing

one of its drugs in development. NWBO's stock reacted to those false statements beginning on

April 17, 2007, and embellished upon on July 9, 2007 with a statement that Swiss authorities had

approved the drug for commercialization and use in patients in Switzerland. Several days later,

on July 16, 2007, the Defendants were forced to reveal the truth that in fact all they had obtained

approval for was a rather ordinary license to export blood sample and import blood sample

derivatives. In fact, NWBO had not even yet applied for marketing approval or submitted data

on the efficacy or safety of the drug. The following graphs demonstrate the stock price reaction

to these statements:

NWBO Stock

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5rnE0 4

Wm

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Date


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NWBO Stock

8

July9,2007MVBODCVax approved

July 16 t007IVWBO

6 wm y availableadmits DCVax is not

Uin Switzerland

commercially available anddid not apply for

CL 5 ---marketing authorization. -April 19, 2007 NWBOannounces files for

Qq -co mmercialization of

finally

mD CVax-Brain in

digested bySwitzerland

market. End of3 doss period.

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Period April 17, 2007 to July 18, 2007

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N N N N (V (V N N (V N (V N N (V N N (V (V N

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Date

III. JURISDICTION AND VENUE

3. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of

the Exchange Act [15 U.S.C. §§ 78j(b) and 78t(a)] and Rule lOb-5 promulgated thereunder by

the Securities and Exchange Commission ("SEC ) [17 C.F.R. § 240.1Ob-5].

4. This Court has jurisdiction over the subject matter of this action pursuant to 28

U.S.C. § 1331 and Section 27 of the Exchange Act [15 U.S.C. § 78aa].

5. Venue is proper in this District pursuant to Section 27 of the Exchange Act and 28

U.S.C. § 1391(b), as many of the acts and practices complained of herein occurred in substantial

part in this District.

6. In connection with the acts alleged in this Complaint, Defendants, directly or

indirectly, used the means and instrumentalities of interstate commerce, including, but not

CONSOLIDATED SECOND AMENDED COMPLAINT FOR ' ..VIOLATION OF THE FEDERAL SECURITIES LAWS - 3Case No. 07-cv-1254 RAJ

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limited to, the mails, interstate telephone communications and the facilities of the national

securities markets.

IV. PARTIES

7. Lead Plaintiff Russell Subia, as set forth in the accompanying certification,

incorporated by reference herein, purchased the securities ofNWBO at artificially inflated prices

during the Class Period and has been damaged thereby.

8. Defendant Northwest Biotherapeutics , Inc. ("NWBO ) (OTCBB: NWBO; AIM:

NWBS and NWBT) is a Delaware corporation. The Company's principal place of business is at

18701 120th Avenue NE, Suite 101, Bothell, WA 98011. The current address of NWBO, which

was changed after the Class Period, is 7600 Wisconsin Ave., 7th Floor, Bethesda, MD 20814, the

same address as Defendants Toucan Capital and Toucan Partners.

9. Defendant Linda F. Powers ("Powers ) was a co-founder of Toucan Capital Fund

II, L.P. ("Toucan Capital ) and served as Toucan Capital's managing director. Ms. Powers was

also the managing member of Toucan Partners LLC ("Toucan Partners ) during the Class Period.

In these senior capacities, Ms. Powers signed for and bound Toucan Capital and Toucan Partners

in agreements with NWBO alleged infra at 1128, 30. Reflecting Toucan Capital and Toucan

Partners' control over NWBO at all relevant times, Ms. Powers was NWBO's Chairman during

the Class Period. On May 17, 2007, she was appointed to serve as a NWBO director until the

Company's 2009 Annual Meeting and until her successor is elected and qualified. Ms. Powers

was also appointed to serve as the non-executive Chairperson ofNWBO's Board of Directors.

Ms. Powers was appointed to NWBO's Audit Committee, Compensation Committee, and

Nominative Committee. Upon admission on June 22, 2007, NWBO is required to pay Powers as

Chairperson and a non-executive member of the Board of Directors approximately $100,000 per

annum for her services.

10. Defendant Alton L. Boynton ("Boynton ) served as NWBO's President and Chief

Executive Officer ("CEO ) during the Class Period. Dr. Boynton co-founded the Company, has


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served as Secretary since August 2001, has served as Executive Vice President since July 2000,

has served as Chief Scientific Officer and a director since inception in 1998, was appointed Chief

Operating Officer in August 2001, and appointed President in May 2003.

11. Defendant Toucan Capital is and was at all times a control person ofNWBO and

Defendant Powers. Ms. Powers was appointed to the Board of Directors pursuant to a

contractual arrangement between Toucan Capital and NWBO. In connection with the sale of

Series A Preferred Stock to Toucan Capital in 2005, the Company and Toucan Capital entered

into an amendment to the Recapitalization Agreement as defined below. The amendment

prevented the Company from changing the number of its authorized directors without the

consent of the holders of majority of the shares of Series A Preferred Stock, of which Toucan

Capital is the sole holder, and permitted the holders of a majority of the shares of Series A

Preferred Sock to cause the Company to increase the total number of directors up to a maximum

of seven. The amendment also provided that any such newly created directorships would be

designated by the holders of a majority of the shares of Preferred Stock to be filled by either:

(i) an outside director with significant industry experience, who is reasonably acceptable to the

holders of a majority of the Preferred Stock, to be elected by the holders of the Company's

Common Stock (which may, subject to applicable law, the Company's certificate of

incorporation or bylaws, be filled initially by vote of the remaining director(s)) (a "Common

Directorship ); or (ii) a director to be designated by the holders of a majority of the Preferred

Stock (a "Preferred Directorship ), subject to the limitation that no more than four (4)

directorships shall be designated as Preferred Directorships, no more than two (2) directorships

shall be designated as Common Directorships, and one (1) director shall be the chief executive

officer of the Company. The newly created directorship has been designated as a Preferred

Directorship and Toucan Capital has designated Ms. Powers to fill this directorship. Toucan

Capital, and entities associated with it, owned, as of April 20, 2006, 394,602,241 or 86.0% of the

"deemed outstanding shares of common stock subject to options , warrants, convertible

CONSOLIDATED SECOND AMENDED COMPLAINT FOR ' ..VIOLATION OF THE FEDERAL SECURITIES LAWS - 5 =Case No . 07-cv-1254 RAJ

H AG E N 5 B E R M A N

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preferred stock or convertible notes held by that person that are currently exercisable or

exercisable within 60 days of April 20, 2006. The address for Toucan Capital is 7600 Wisconsin

Ave., 7th Floor, Bethesda, MD 20814, the same address as NWBO.

12. Defendant Toucan Partners is an affiliate of Toucan Capital and held, as of April

20, 2007, 24,427,721 shares of common stock issuable upon conversion of promissory notes held

by Toucan Partners and 9 , 500,000 shares issuable upon exercise of warrants held by Toucan

Partners . The address for Toucan Partners is 7600 Wisconsin Ave., 7th Floor, Bethesda, MD

20814, the same address as NWBO.

13. Defendants Powers, Boynton, Toucan Capital and Toucan Partners are,

collectively, the "Non-Issuer Defendants. During the Class Period, Defendants Powers and

Boyton were directors ofNWBO. The only other director was Jim D. Johnston, who was

appointed to serve as a director of the Company until the Company's 2008 Annual Meeting and

until his successor is elected and qualified. Mr. Johnston had been the Company's General

Counsel and Chief Financial Officer since March 1, 2007.

14. The Non-Issuer Defendants' positions with or control of the Company gave them

access to the adverse undisclosed information about the Company's business, operations,

operational trends, financial statements, markets and present and future business prospects via

access to internal corporate documents (including the Company's operating plans, budgets and

forecasts and reports of actual operations compared thereto), conversations and connections with

other corporate officers and employees, attendance at management and Board of Directors

meetings and committees thereof and via reports and other information provided to them in

connection therewith.

15. The Non-Issuer Defendants are pled as a group based on the presumption that the

false, misleading and incomplete information conveyed in the Company' s public filings, press

releases and other publications as alleged herein are the collective actions of the narrowly

defined group of Defendants identified above. Each of the above officers ofNWBO, by virtue of


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their high-level positions with the Company, directly participated in the management of the

Company, can be presumed to have been directly involved in the day-to-day operations of the

Company at the highest levels and was privy to confidential proprietary information concerning

the Company and its business, operations, growth, financial statements, and financial condition,

as alleged herein.

16. As officers and controlling persons of a publicly-held company whose common

stock was, and is, registered with the SEC pursuant to the Exchange Act, and was, and is, traded

publicly, and governed by the provisions of the federal securities laws, the Non-Issuer

Defendants each had a duty to disseminate promptly, accurate and truthful information with

respect to the Company's financial condition and performance, growth, operations, financial

statements, business, markets, management, earnings and present and future business prospects,

and to correct any previously-issued statements that had become materially misleading or untrue,

so that the market price of the Company's publicly-traded common stock would be based upon

truthful and accurate information. The Non-Issuer Defendants' misrepresentations and

omissions during the Class Period violated these specific requirements and obligations.

17. The Non-Issuer Defendants participated in the drafting, preparation, and/or

approval of the various public and shareholder and investor reports and other communications

complained of herein and were aware of, or recklessly disregarded, the misstatements contained

therein and omissions therefrom, and were aware of their materially false and misleading nature.

Because of their Board membership and/or executive and managerial positions with NWBO,

each of the Non-Issuer Defendants had access to the adverse undisclosed information about

NWBO's business prospects and financial condition and performance as particularized herein

and knew (or recklessly disregarded) that these adverse facts rendered the positive

representations made by or about NWBO and its business issued or adopted by the Company

materially false and misleading.


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18. The Non-Issuer Defendants, because of their positions of control and authority as

officers and/or directors of the Company, were able to and did control the content of the various

SEC filings, press releases and other public statements pertaining to the Company during the

Class Period. Each Non-Issuer Defendant was provided with copies of the documents alleged

herein to be misleading prior to or shortly after their issuance and/or had the ability and/or

opportunity to prevent their issuance or cause them to be corrected. Accordingly, each of the

Non-Issuer Defendants is responsible for the accuracy of the public reports and releases detailed

herein and is therefore primarily liable for the representations contained therein.

19. Each of the Defendants is liable as a participant in a fraudulent scheme and course

of business that operated as a fraud or deceit on purchasers ofNWBO common stock by

disseminating materially false and misleading statements and/or concealing material adverse

facts. The scheme: (i) deceived the investing public regarding NWBO's business, operations,

management and the intrinsic value ofNWBO common stock; and (ii) caused Lead Plaintiff and

other members of the Class to purchase NWBO common stock at artificially inflated prices.

V. LEAD PLAINTIFF'S CLASS ACTION ALLEGATIONS

20. Lead Plaintiff brings this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased the

securities ofNWBO during the Class Period, inclusive (the "Class ) and who were damaged

thereby. Excluded from the Class are Defendants, the officers and directors of the Company, at

all relevant times, members of their immediate families and their legal representatives, heirs,

successors or assigns and any entity in which Defendants have or had a controlling interest.

21. The members of the Class are so numerous that joinder of all members is

impracticable. Throughout the Class Period, NWBO common shares were actively and publicly

traded. While the exact number of Class members is unknown to Lead Plaintiff at this time and

can only be ascertained through appropriate discovery, Lead Plaintiff believes that there are

hundreds or thousands of members in the proposed Class. Record owners and other members of


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the Class may be identified from records maintained by NWBO or its transfer agent and may be

notified of the pendency of this action by mail, using the form of notice similar to that

I customarily used in securities class actions.

22. Lead Plaintiff's claims are typical of the claims of the members of the Class as all

members of the Class are similarly affected by Defendants' wrongful conduct in violation of

federal law that is complained of herein.

23. Lead Plaintiff will fairly and adequately protect the interests of the members of

the Class and has retained counsel competent and experienced in class and securities litigation.

24. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

(a) whether the federal securities laws were violated by Defendants' acts as

I alleged herein;

(b) whether statements made by Defendants to the investing public during the

Class Period misrepresented material facts about the business, operations and management of

NWBO; and

(c) to what extent the members of the Class have sustained damages and the

proper measure of damages.

25. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joining all members is impracticable. Furthermore, as the

damages suffered by individual Class members may be relatively small, the expense and burden

of individual litigation make it impossible for members of the Class to individually redress the

wrongs done to them. There will be no difficulty in the management of this action as a class

action.


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VI. BACKGROUND AND MOTIVE FOR THE FRAUD

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26. Defendant Northwest Biotherapeutics is a development stage biotechnology

company focused on discovering, developing, and commercializing immunotherapy products

that safely generate and enhance immune system responses to effectively treat cancer. NWBO

has two basic technology platforms applicable to cancer therapeutics; dendritic cell-based cancer

vaccines, which are called DCVax® and monoclonal antibodies for cancer therapeutics.

27. NWBO was illiquid by 2007 . In early 2007, the Company was in a dire need to

I raise cash. As stated in the Company's 10-Q for the quarterly period ended March 31, 2007:

There can be no assurance that the Company's efforts to seekfunding will be successful. If the Company's capital raising effortsare unsuccessful, its inability to obtain additional cash as neededcould have a material adverse effect on the Company's financialposition, results of operations and its ability to continue itsexistence. The Company's independent auditors have indicated intheir report on the financial statements, included in theDecember 31, 2006 annual report on Form 10-K, that there issubstantial doubt about the Company's ability to continue as agoing concern.

*****

As of April 30, 2007, the Company had less than $200,000 of cash.The Company is considered illiquid as this cash is not sufficient tofund the recurring operating and associated financing costs for thenext month. Approximately $7.0 million ofthe Company's$8.2 million current liabilities at March 31, 2006 werepayable torelatedparties, including the manufacturing costs associated withproducing its DCVax® product candidates . The payable balance isreported net of the remaining debt discount . The Company paysapproximately $250,000 of the related party liabilities balance permonth related to manufacturing of its DCVax® productcandidates . Further , during the last quarter of 2006, the Companycommenced a clinical trial which has increased its current cashneeds.

28. Loans Due to Toucan Due to 2004 Recapitalization . Since 2004, the Company

had undergone a significant recapitalization pursuant to which Toucan Capital Fund II, L.P.

("Toucan Capital ) loaned the Company an aggregate of $6.75 million and Toucan Partners

LLC, an affiliate of Toucan Capital ("Toucan Partners ), loaned the Company an aggregate of


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$4.1 million, including $3.15 million of contingently convertible promissory notes. The

$4.1 million loaned to the Company by Toucan Partners was loaned in a series of transactions.

(1) From November 14, 2005 through March 9, 2006, the Company issued three

promissory notes to Toucan Partners, pursuant to which Toucan Partners loaned the

Company an aggregate of $950,000.

(2) From October 2006 through April 2007, Toucan Partners provided

$3.15 million in cash advances.

29. Toucan Partners could convert the aggregate outstanding principal of $4.1 million

and related accrued interest owed to Toucan collaborates (in whole or in part) into Common

Stock at a conversion price to be determined.

30. Toucan ' s Securities Purchase . On January 26, 2005, the Company entered into

a securities purchase agreement with Toucan Capital pursuant to which Toucan Capital

purchased 32.5 million shares of the Company's Series A cumulative convertible preferred stock

(the "Series A Preferred Stock ) at a purchase price of $0.04 per share, for a net purchase price

of $1.267 million, net of offering related costs of approximately $24,000.

31. Private Placement of 2.63 million shares and Penalties for Expiration of

Registration Statement in April. Separately, on March 30, 2006, the Company entered into a

securities purchase agreement (the "Purchase Agreement ) with a group of accredited investors

pursuant to which the Company sold an aggregate of approximately 2.63 million shares of its

Common Stock, at a price of $2.10 per share (the "PIPE Shares ), and issued, for no additional

consideration, warrants to purchase up to an aggregate of approximately 1.3 million shares of

Company's Common Stock (the "Warrant Shares ).

32. Under the Purchase Agreement, the Company agreed to register for resale under

the Securities Act of 1933, as amended (the "Securities Act ) both the PIPE Shares and the

Warrant Shares . The Company also agreed to other customary obligations regarding registration,

including matters relating to indemnification, maintenance of the registration statement, payment


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of expenses, and compliance with state "blue sky laws. Under the agreement the Company was

to be liable for liquidated damages if the registration statement (after being declared effective)

ceased to be effective in a manner, and for a period of time, that violated the Company's

obligations under the Purchase Agreement. The amount of the liquidated damages payable to the

investors is, in aggregate, one percent (1%) of the aggregate purchase price of the shares per

month, subject to a cap of ten percent (10%) of the aggregate purchase price of the shares.

33. As of April 17, 2007, the Company's registration statement ceased to be effective.

Accordingly, the Company began to incur liquidated damages until the Company files a post-

effective amendment to the registration statement and such post-effective amendment is declared

effective by the SEC. During the three and nine months ended September 30, 2007, the

Company accrued liquidated damages in the amount of $71,000 and $154,000, respectively, as a

charge to interest expense.

34. NWBO Announces Filing of Authorization for Use To Keep Lenders and

I Private Investors at the Table . As part of its efforts to raise cash, and to attract private

investors, and to revitalize effort to register these shares, and to appease Toucan Capital and

Toucan Partners, the Company issued a press release on April 17, 2007, proclaiming that it was

on the cusp of commercial approval of its drug, DCVax®-Brain, in Switzerland. The press

release stated in relevant part:

Northwest Biotherapeutics Files for Authorization for Use ofDCVax(R)-Brain for Commercialization in Switzerland

BOTHELL, Washington , April 17 /PRNewswire/ --

Northwest Biotherapeutics, Inc. (OTC Bulletin Board: NWBT),today announced that it has filed for Authorization for Use of itsDCVax(R)-Brain therapeutic vaccine in Switzerland to treatpatients with malignant brain cancers, including Glioblastomamultiforme (GBM), the most aggressive and lethal form of braincancer. If approved, Northwest Biotherapeutics will be authorizedto commercialize, market and import/export DCVax(R)-Brain forthe treatment of patients at selected centers in Switzerland. Theapplication, submitted to the Swiss Institute of Public Health orBundesamt fur Gesundheit (BAG), will be reviewed by the BAG


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and Swissmedic. Northwest Biotherapeutics expects to receive adecision from the BAG during Q3 of this year.

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"We are excited to achieve a major milestone of our corporatestrategy, and to have the possibility of bringing one of the firstpersonalized therapies to market on a highly cost-effective basis.We are also excited to potentially bring an important newtreatment to patients suffering from one of the most aggressivecancers, for which little can be done today stated Alton Boynton,President of Northwest Biotherapeutics. "We look forward topreparingfor the commercial use ofDCVax(R)-Brain at leadingmedical centers in Switzerland later this year, and soonafterwards in other countries. Switzerland is an attractiveplaceto begin commercialization, due to its highly respected regulatoryoversight, and its growing experience with cellular therapies.Switzerland is also increasingly notedfor medical tourism.

35. Renegotiation of Toucan Partners ' Loans . In April 2007, the Company and

Toucan Partners reached an agreement that the $3.15 million would be an were converted into a

new series of convertible promissory notes (and associated warrants), the 2007 Convertible

Notes and "2007 Warrants, that accrued interest at 10% per annum from their respective

original cash advance dates. The conversion terms of these notes and the exercise price of these

warrants were not fixed, however. On June 1, 2007, the Company and Toucan Partners amended

the 2007 Convertible Notes and 2007 Warrants to specify and fix the conversion and exercise

prices thereof. The Company and Toucan Partners also entered into two new promissory notes

to fix the terms of the two additional cash advances provided by Toucan Partners to the

Company on May 14, 2007 and May 25, 2007 in the aggregate amount of $725,000, and issued

warrants to purchase shares of the Company's capital stock to Toucan Partners in connection

with each such note. These notes and warrants have the same terms as the previous 2007

Convertible Notes and 2007 Warrants. As amended, the 2007 Convertible Notes provided that

the principal and interest thereon was convertible into shares of the Company's Series A-1

Preferred Stock at the conversion price of $1.60 per share (with each such share of Series A-1

Preferred Stock convertible into 2.67 shares of Common Stock at $0.60 per share) or, at the

election of Toucan Partners, any other equity security of the Company (at a conversion price of


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$0.60 per share). As amended, the 2007 Warrants provided that they were exercisable for shares

of Series A-1 Preferred Stock at the exercise price of $1.60 per share (with each such share of

Series A-1 Preferred Stock convertible into 2.67 shares of Common Stock at $0.60 per share) or,

at the election of Toucan Partners, any other equity security of the Company (at an exercise price

of $0.60 per share). Each of the 2007 Warrants was exercisable for the same number of shares

that the corresponding 2007 Convertible Note is convertible into at the time of exercise or, if

earlier, the date on which the corresponding 2007 Convertible Note is either converted or repaid

in full.

36. In recognition of the modification to the 2007 Convertible Notes and 2007

Warrants, the aggregate proceeds of $3,875,000 received from Toucan Partners between October

2006 and May 2007 and the aggregate proceeds of $950,000 received from Toucan Partners

between November 14, 2005 and March 9, 2006 were reallocated between the notes (including

accrued interest) and warrants on a relative fair value basis as of June 1, 2007. The value

allocated to the warrants on the date of the modification was approximately $3.7 million. The

fair value of the warrants was determined using the Black-Scholes option pricing model with the

following assumptions: expected dividend yield of 0%, risk-free interest rate of 4.9%, volatility

of 240%, and a contractual life of 7 years. The value of the warrants was recorded as a deferred

debt discount against the $4.825 million proceeds (plus accrued interest) of the notes. In

addition, a beneficial conversion feature related to the notes was determined to be approximately

$1.4 million. As a result, the total discount on the notes (including accrued interest) equaled

$5.1 million which has been expensed in its entirety in June 2007 in recognition of the June 30,

2007 maturity date of the respective notes. Interest accretion on the notes of approximately

$109,000 and $182,000 was recorded for the three and six months ended June 30, 2007,

respectively. Interest accretion on the notes of approximately $23,400 and $41,700 was recorded

for the three and six months ended June 30, 2006, respectively.


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37. At June 30, 2007, the principal and cumulative interest balance of the 2007

Convertible Notes totaled $4.825 million and $0.293 million, respectively, and were convertible

into 8,529,479 shares of Common Stock and Toucan Partners held 2007 Warrants to purchase a

further 8,529,479 shares of Common Stock at $0.60 per share.

38. Toucan Capital Is Issued More Warrants for Preferred Stock. On June 1,

2007, the Company issued to Toucan Capital a new warrant to purchase the Company's Series

A-1 Preferred Stock ("Toucan Capital Series A-1 Warrant ) in exchange for the cancellation of

all previously issued warrants to purchase Series A-1 Preferred Stock (or, at the election of

Toucan Capital, any other equity or debt security of the Company) held by Toucan Capital. The

Toucan Capital Series A-1 Warrant was exercisable for 6,471,333 shares of Series A-1 Preferred

Stock (plus shares of Series A-1 Preferred Stock attributable to accrued dividends on the shares

of Series A-1 Preferred Stock held by Toucan Capital) (with each such Series A-1 Preferred

Share convertible into 2.67 shares of Common Stock at $0.60 per share) as compared to the

3,062,500 shares of Series A-1 Preferred Stock (with each such Series A-1 Preferred Share

convertible into 2.67 shares of Common Stock at $0.60 per share) that were previously issuable

to Toucan Capital upon exercise of the warrants being cancelled.

39. Also on June 1, 2007, the Company and Toucan Capital amended Toucan

Capital's warrant to purchase Series A Preferred Stock ("Toucan Capital Series A Warrant ) to

increase the number of shares of Series A Preferred Stock that were issuable upon exercise of the

warrant to 32,500,000 shares of Series A Preferred Stock (plus shares of Series A Preferred

Stock attributable to accrued dividends on the shares of Series A Preferred Stock held by Toucan

Capital) from 13,000,000 shares of Series A Preferred Stock.

40. In connection with the modifications of the Series A and Series A-1 Preferred

Stock warrants, the Company recognized reductions in earnings applicable to common

stockholders in June 2007 of $2.3 million and $16.4 million, respectively. The fair value of the

warrant modifications was determined using the Black-Scholes option pricing model with the

CONSOLIDATED SECOND AMENDED COMPLAINT FOR ' ..VIOLATION OF THE FEDERAL SECURITIES LAWS - 15 =Case No . 07-cv-1254 RAJ


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following assumptions : expected dividend yield of 0%, risk-free interest rate of 5.0% volatility

of 398%, and a contractual life of 7 years.

41. NWBO Initiates Placement of Shares with Foreign Institutional Investors,

Listing on AIM, and Conversion of Toucan Preferred Stock to Common. On May 21, 2007,

NWBO announced that it intended to place shares of its Common Stock with foreign institutional

investors, subject to market and other customary conditions. The Company expected the gross

proceeds from the placement to be up to $30 million. The Company also stated that it currently

planned to use the net proceeds from the placement, if any, to pay down approximately

$6.5 million of existing debt, to fund an estimated cost of $12.5 million for clinical trials, and for

working capital purposes.

42. On June 4, 2007, NWBO announced that it had initiated a previously intended

placement of shares of its Common Stock with foreign institutional investors, subject to market

and other customary conditions. The Company expected the gross proceeds from the placement

to be up to $30 million. The Company stated that it planned to use the net proceeds from the

placement to pay down existing debt, to fund clinical trials and for working capital purposes.

43. NWBO also stated in a Current Report on Form 8-K filed that day with the SEC,

that in conjunction with the Company's proposed placement of its Common Stock with foreign

institutional investors and the admission of its Common Stock to trading on a European

securities market (the "Admission ), the Company intended to enter into the following

agreements and take the actions set out below, each conditional on Admission to the Alternative

Investment Market ("AIM ). (The AIM is the London Stock Exchange's international market

for smaller growing companies. To join AIM, companies do not need a particular financial track

record or trading history. There is also no minimum requirement in terms of size or number of

shareholders.):

• Reverse Stock Split and Reduction in Authorized Shares. The Boardintends , on Admission , to effect the previously announced andstockholder approved reverse stock split of the Company's outstanding

CONSOLIDATED SECOND AMENDED COMPLAINT FOR ' ..VIOLATION OF THE FEDERAL SECURITIES LAWS - 16 =Case No. 07-cv-1254 RAJ

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common stock (the "Reverse Stock Split ), and expects to fix theexchange ratio of the Reverse Stock Split at 15-for-1. The Board alsointends to simultaneously effect a 15-for-1 reverse stock split of theCompany's outstanding Series A Preferred Stock and Series A-1Preferred Stock. In addition, the Board intends to, on Admission andsubject to stockholder approval, approve an amendment to theCompany's Certificate of Incorporation to reduce the number ofauthorized shares of common stock from 800,000,000 to 100,000,000and reduce the number of authorized shares of preferred stock of theCompany from 300,000,000 to 20,000,000.

Conversion ofPreferred Stock and Related Matters. The Company,Toucan Capital and Toucan Partners currently anticipate entering into,on Admission, an agreement (the "Conversion Agreement ), pursuantto which Toucan Capital would convert all of its Series A PreferredStock and Series A-1 Preferred Stock (excluding any accrued andunpaid dividends) into common stock and eliminate a number ofrights, preferences and protections associated with the Series APreferred Stock and Series A-1 Preferred Stock, including theliquidation preference entitling Toucan Capital to certain substantialcash payments, and Toucan Partners would agree to eliminate all of itsrights to receive Series A-1 Preferred Stock under the Toucan PartnersNotes and Toucan Partners Warrants, and the rights, preferences andprotections associated with the Series A-1 Preferred Stock, includingthe liquidation preference that would entitle Toucan Partners to certainsubstantial cash payments, in return for issuance by the Company of anaggregate of 6,860,561 shares of common stock (after giving effect tothe Reverse Stock Split), to be apportioned between Toucan Capitaland Toucan Partners as to 4,287,851 and 2,572,710 shares of commonstock, respectively. In addition, under the Conversion Agreement:

o the Series A Preferred Warrant held by Toucan Capital wouldbecome exercisable for 2,166,667 shares of common stock(after giving effect to the Reverse Stock Split) rather thanshares of Series A Preferred Stock (plus shares of commonstock, rather than shares of Series A Preferred Stock,attributable to accrued dividends on the shares of Series APreferred Stock held by Toucan Capital);

o the Toucan Capital Series A-1 Warrant would becomeexercisable for 17,256,888 shares of common stock (aftergiving effect to the Reverse Stock Split) rather than shares ofSeries A-1 Preferred Stock (plus shares of common stock,rather than shares of Series A-1 Preferred Stock attributable to


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accrued dividends on the shares of Series A-1 Preferred Stockheld by Toucan Capital);

o the 2,166,667 shares of Series A Preferred Stock held byToucan Capital would convert, in accordance with their termsinto 2,166,667 shares of common stock (after giving effect tothe Reverse Stock Split);

o the 321,124 shares of Series A-1 Preferred Stock held byToucan Capital would convert, in accordance with their terms,into 12,844,968 shares of common stock (after giving effect tothe Reverse Stock Split);

o the Toucan Partners Notes would become convertible solely forcommon stock;

o and the Company would agree not to repay the Toucan PartnersNotes before June 30, 2007 and Toucan Partners would agreenot to convert the Toucan Partners Notes before July 1, 2007.

In addition, under the Conversion Agreement, Toucan Capital wouldalso agree to defer receipt of the accrued and unpaid dividends on itsshares of Series A Preferred Stock and Series A-1 Preferred Stockuntil not later than September 30, 2007. To the extent that all accruedand unpaid dividends are not paid in cash on or before September 30,2007, Toucan Capital could elect, in its sole discretion, to have theaccrued and unpaid dividends satisfied, in whole or in part (includingthrough a combination of the following), by (A) cash payment;(B) offset or satisfaction of the applicable exercise prices of some orall of the Series A Preferred Warrant and/or Toucan Capital Series A-1Warrant, such that the aggregate exercise price of such warrants wouldbe reduced by an amount equal to the amount of accrued and unpaiddividends being satisfied through such adjustment; or (C) the issuanceof common stock at $0.60 per share (after giving effect to the ReverseStock Split) (as adjusted for stock splits, stock dividends, reverse stocksplits and similar actions effected after the date of the ConversionAgreement).

Stock Option Plans . The Company intends to establish a new stockoption plan upon Admission. The Company intends to reserve a totalof 5,480,868 shares of common stock for issue in respect of optionsgranted under the plan (after giving effect to the Reverse Stock Split).The plan if adopted will provide for the grant to employees of theCompany, its parents and subsidiaries, including officers andemployee directors, of "incentive stock options within the meaning of


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Section 422 of the US Internal Revenue Code and for the grant of non-statutory stock options to the employees, officers, directors, includingnon-employee director, and consultants of the Company, its parentsand subsidiaries. To the extent an optionee would have the right inany calendar year to exercise for the first time one or more incentivestock options for shares having an aggregate fair market value, underall of the Company's plans and determined as of the grant date, inexcess of $100,000, any such excess options will be treated as non-statutory options. In addition, the Company intends to amend itsexisting equity plans such that no further option grants may be madeunder those plans.

Board Appointment. Conditioned on Admission , the Companyintends to expand the Board of Directors to four members and appointR. Steve Harris , 64, to fill the newly created vacancy on the Board.Mr. Harris would join the Board as a non-executive director of theCompany effective upon Admission. Mr. Harris is currently the non-executive Chairman of Proteome Sciences plc, Conv plc and SinclairPharma plc. He is also a non-executive Director of SkyePharma plc,Advanced Medical Solutions plc and Premier Research plc.Mr. Harris holds a Bachelor of Pharmacy Degree (University ofLondon) and was elected a Fellow of the Royal PharmaceuticalSociety in 2000.

Employment and Other Compensation Arrangements. The followingare particulars of service agreements the Company intends to enter intoupon Admission:

o Employment agreement with Alton L. Boynton. Under theterms of the agreement, Mr. Boynton would be employed asthe Company's Chief Executive Officer, President andSecretary for an indefinite term and would serve as a memberof Board. Pursuant to the terms of the agreement, Mr. Boyntonwould be paid annual compensation of $331,250 per annum forhis services. The agreement would provide for standardbenefits, including coverage under the Company's medical,dental, vision, life and disability policies. Mr. Boynton wouldbe eligible to participate in the Company's 401(k) plan and toreceive a bonus at the discretion of the Board. This agreementwould be terminable upon 180 days' notice by either party andimmediately for cause.

o Employment agreement with Jim D. Johnston. Under the termsof the agreement, Mr. Johnston would be employed as theCompany's Chief Financial Officer and General Counsel and


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serve as a member of the Board. Pursuant to the terms of theagreement, Mr. Johnston would be paid annual compensationof $180,000 per annum for his services. Mr. Johnston would berequired to devote 60 percent of his time to the Company'sbusiness. The agreement would provide for standard benefits,including coverage under the Company's medical, dental,vision, life and disability policies. Mr. Johnston would beeligible to participate in the Company's 401(k) plan and toreceive a bonus at the discretion of the Board. This agreementwould be terminable upon 60 days' notice by either party andimmediately for cause.

o Non-executive directors. The Company would pay LindaPowers as Chairperson and a non-executive member of theBoard approximately $100,000 per annum for her services.This agreement would be terminable upon 180 days' notice byeither party and immediately for cause. The Company wouldpay R. Steve Harris as a non-executive member of the Boardapproximately $60,000 per annum for his services. Thisagreement would be terminable upon 90 days' notice by eitherparty and immediately for cause.

• Lock up Agreements. Each of the directors of the Company andToucan Capital will, following the Admission, undertake not todispose of any common stock (or any interest) held by them (subject tocertain limited exemptions) for a period of 12 months followingAdmission.

Repayment of Toucan Partners Notes. The Company currentlyintends to repay the Toucan Partners Notes on June 30, 2007. If theToucan Partners Notes are not repaid on June 30, 2007, interest willcontinue to accrue on the Toucan Partners Notes and the number ofshares of equity or debt securities into which the Toucan PartnersNotes and the Toucan Partners Warrants are convertible andexercisable, respectively, will continue to increase accordingly.Assuming the Toucan Partners Notes are repaid on June 30, 2007, theToucan Partners Warrants will remain outstanding and will beexercisable for an aggregate of 8,529,479 shares of common stock atan exercise price of $0.60 per share (after giving effect to the ReverseStock Split).

44. On June 15, 2007, the Company, Toucan Capital, and Toucan Partners entered into a

conversion agreement ("Conversion Agreement ) which was to become effective on June 22,


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2007, upon the admission of the Company's Common Stock to trade on the London Stock

Exchange's AIM.

45. NWBO Achieves Listing on the AIM of the London Stock Exchange. On

June 22, 2007, NWBO was listed on the AIM as agreed. Alternative Investment Market of the

London Stock Exchange.

46. June 22, 2007 Private Placement of $29.9 million and Listing on the AIM of

the London Stock Exchange. On June 22, 2007, the Company also announced that it placed

15,789,473 shares of its Common Stock with foreign institutional investors at a price of £0.95

per share. The gross proceeds from the placement were approximately £15.0 million, or

$29.9 million, while net proceeds from the offering, after deducting commissions and expenses,

were approximately £13.0 million, or $25.9 million. The Company stated that it planned to use

the net proceeds from the placement to fund clinical trials, product and process development,

working capital and repayment of certain existing debt.

47. Toucan Shares of Preferred Get Converted to Common Stock. As a result of

the above, pursuant to the terms of the Conversion Agreement (i) Toucan Capital agreed to

convert and has converted all of its shares of the Company's Series A Preferred Stock and

Series A-1 Preferred Stock (in each case, excluding any accrued and unpaid dividends) into

Common Stock and agreed to eliminate a number of rights, preferences and protections

associated with the Series A Preferred Stock and Series A-1 Preferred Stock, including the

liquidation preference entitling Toucan Capital to certain substantial cash payments; and

(ii) Toucan Partners agreed to eliminate all of its existing rights to receive Series A-1 Preferred

Stock under certain notes and warrants (and thereafter to receive shares of Common Stock rather

than shares of Series A-1 Preferred Stock), and (iii) the rights, preferences and protections

associated with the Series A-1 Preferred Stock, including the liquidation preference that would

entitle Toucan Partners to certain substantial cash payments, in return for issuance by the

Company of an aggregate of 6,860,561 additional shares of Common Stock, to be apportioned


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between Toucan Capital and Toucan Partners as to 4,287,851 and 2,572,710 shares of Common

Stock, respectively. In connection with the issuance of these shares, the Company recognized a

further reduction of earnings applicable to common stockholders of $12.3 million in June 2007.

48. Following conversion by Toucan Capital of all of its shares of the Company's

Series A Preferred Stock and Series A-1 Preferred Stock, no shares of either series of preferred

stock remained outstanding. Accordingly, as approved by the Board of Directors of the

Company, upon Admission on June 22, 2007, the Company filed with the Secretary of State of

the State of Delaware Certificates of Elimination of the Series A Preferred Stock and Series A-1

Preferred Stock, to eliminate the Company's Series A Preferred Stock and Series A-1 Preferred

Stock, respectively.

49. In addition, under the terms of the Conversion Agreement (i) the Toucan Capital

Series A Warrant became exercisable for 2,166,667 shares of Common Stock rather than shares

of Series A Preferred Stock (plus shares of Common Stock, rather than shares of Series A

Preferred Stock, attributable to accrued dividends on the shares of Series A Preferred Stock

previously held by Toucan Capital that were converted into Common Stock upon Admission,

subject to the further provisions of the Conversion Agreement as described below) and (ii) the

Toucan Capital Series A-1 Warrant is exercisable for an aggregate of 17,256,888 shares of

Common Stock rather than shares of Series A-1 Preferred Stock (plus shares of Common Stock,

rather than shares of Series A-1 Preferred Stock, attributable to accrued dividends on the shares

of Series A-1 Preferred Stock previously held by Toucan Capital that were converted into

Common Stock upon Admission), subject to further provisions of the Conversion Agreement as

described below.

50. The 32,500,000 shares of Series A Preferred Stock held by Toucan Capital

converted, in accordance with their terms, into 2,166,667 shares of Common Stock and the

4,816, 863 shares of Series A-1 Preferred Stock held by Toucan Capital converted, in accordance

with their terms , into 12 , 844,968 shares of Common Stock. In addition , the convertible

CONSOLIDATED SECOND AMENDED COMPLAINT FOR ' ..VIOLATION OF THE FEDERAL SECURITIES LAWS - 22Case No . 07-cv-1254 RAJ

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promissory notes issued by the Company to Toucan Partners in aggregate principal amount of

$4.825 million and associated warrants (the "2007 Warrants ) became convertible and

exercisable solely for shares of Common Stock.

51. Under the terms of the Conversion Agreement, Toucan Capital also agreed to

temporarily defer receipt of the accrued and unpaid dividends on its shares of Series A Preferred

Stock and Series A-1 Preferred Stock of amounts equal to $334,340 and $917,451, respectively,

until not later than September 30, 2007. During the third quarter of 2007, the Company paid all

of the accrued and unpaid preferred stock dividends in cash.

52. The Reverse Stock Split is Announced With a New Listing On NASDAQ. On

June 28, 2007, NWBO announced that it had been advised by NASDAQ that on June 28, 2007,

its shares of Common Stock will trade under the symbol NWBO with a CUSIP number

6637P501 and would reflect the effect of the one-for fifteen reverse stock split which was

previously announced and took effect on June 19, 2007. As a result of the reverse stock split,

every 15 shares ofNWBO's common stock were combined into one common share.

VII. FALSE AND MISLEADING STATEMENTS

53. NWBO Announces Filing of Authorization for Commercialization in

Switzerland and Medical Tourism . As stated above, at a time when NWBO was in dire need

to raise cash, and to attract private investors, and to revitalize effort to register these shares, and

to appease Toucan, the Company issued a press release on April 17, 2007, proclaiming that it

was on the cusp of commercial approval of its drug, DCVax®-Brain, in Switzerland. The press

release stated in relevant part:

Northwest Biotherapeutics Files for Authorization for Use ofDCVax(R)-Brain for Commercialization in Switzerland

BOTHELL, Washington , April 17 /PRNewswire/ --

Northwest Biotherapeutics, Inc. (OTC Bulletin Board: NWBT),today announced that it has filed for Authorization for Use of itsDCVax(R)-Brain therapeutic vaccine in Switzerland to treatpatients with malignant brain cancers, including Glioblastoma


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multiforme (GBM), the most aggressive and lethal form of braincancer . Ifapproved, Northwest Biotherapeutics will beauthorized to commercialize, market and import/exportDCVax(R)-Brain for the treatment ofpatients at selected centersin Switzerland. The application, submitted to the Swiss Instituteof Public Health or Bundesamt fur Gesundheit (BAG), will bereviewed by the BAG and Swissmedic. Northwest Biotherapeuticsexpects to receive a decision from the BAG during Q3 of this year.

"We are excited to achieve a major milestone of our corporatestrategy, and to have the possibility of bringing one of the firstpersonalized therapies to market on a highly cost-effective basis.We are also excited to potentially bring an important newtreatment to patients suffering from one of the most aggressivecancers, for which little can be done today stated Alton Boynton,President of Northwest Biotherapeutics. "We look forward topreparingfor the commercial use ofDCVax(R)-Brain at leadingmedical centers in Switzerland later this year, and soonafterwards in other countries. Switzerland is an attractiveplaceto begin commercialization, due to its highly respected regulatoryoversight, and its growing experience with cellular therapies.Switzerland is also increasingly notedfor medical tourism.

54. On July 9, 2007, Defendants issued a press release entitled "World's First

Therapeutic Vaccine for Brain Cancer Commercially Available to Patients in Switzerland. The

release stated that the company received an "authorization for use from the Swiss authorities

and that "DCVax-Brain is the first commercially available therapeutic vaccine for such cancers.

The Company intends to begin making the product available to patients in Q3 2007. The press

release in its entirely follows:

Media Contact: Linda Powers 240-441-6047 240-497-4060

World's First Therapeutic Vaccine for Brain CancerCommercially Available to Patients in Switzerland

Swiss "Authorization for Use" Approved for DCVax®-Brain

Patient survival is more than doubled in both newlydiagnosed and recurrent brain cancers

Bothell, WA, - July 9, 2007 - Northwest Biotherapeutics, Inc.(OTC BB: NWBO.US; AIM: NWBS and NWBT), is pleased toannounce that it has received Authorization for Use from the SwissInstitute of Public Health (Bundesamt f r Gesundheit; "BAG ) tomake DCVax®-Brain commercially available for treatment ofbrain cancer patients in Switzerland. As such, DCVax®-Brain is


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the first commercially available therapeutic vaccine for suchcancers. The Company intends to begin making the productavailable to patients in Q3 2007.

Dr. Alton Boynton, President and CEO of NorthwestBiotherapeutics, said: "We are delighted to be thefirst companyto reach the market with a personalized therapeutic vaccineforbrain cancers, which carry a very bleakprognosisforpatientstoday. We lookforward to providing DCVax®Brain at leadingmedical centers and hospitals in Switzerland Switzerland is anattractiveplace to begin commercialization , due to its highlyrespected regulatory oversight, and its growing experience withcellular therapies. Switzerland is also increasingly noted formedical tourism, and is easily accessible for many medical tourists.We look forward to being able to bring DCVax®-Brain to patientsin additional countries, and to applying our DCVax® technologyto many other cancers, including the five for which we alreadyhave FDA clearance to begin clinical trials.

"Finally, we are especially pleased to achieve such a majormilestone substantially ahead ofschedule and so soon after ourflotation on the AIM market of the London Stock Exchange.

Brain cancers can strike all ages , and are the leading cause ofcancer deaths in children under the age of 20 . Brain cancers areamong the most rapidly lethal cancers : with the limited treatmentsavailable today, even newly diagnosed patients have a mediansurvival of only 14.6 months . In clinical trials , both newlydiagnosed and recurrent brain cancer patients treated withDCVax®-Brain had more than double the survival time of patientswho did not receive DCVax®-Brain (to over 33 months andcontinuing - median not yet reached - for 2 newly diagnosedpatients). In addition , unlike chemotherapy, DCVax®-Brain doesnot cause any debilitating side effects.

Under the Swiss Authorization for Use, the Company is permittedto manufacture DCVax®Brain in the US and make it availablefor the treatment ofpatients with brain cancer at select centers inSwitzerland. The Authorization was granted in response to theCompany's application in mid-February, 2007. It was based uponthe Company 's clinical data to date, and upon an extensiveinspection by Swissmedic (the Swiss Agency for TherapeuticProducts) on behalf of the BAG.

NWBT's DCVax® is a platform technology which is anticipatedto be applicable to most cancers. DCVax® works by mobilizingthe full spectrum of immune response, both innate and adaptive,rather than just single immune agents such as antibodies alone orT cells alone. As such, DCVax® mobilizes the patient's immunesystem to function in its normal, natural way. This leads to bothimproved efficacy and lack of problematic toxicities. Unlike


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conventional cancer drugs , DCVax® does not cause anydebilitating side effects.

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DCVax® products are personalized treatments, made bycombining a patient's own master immune cells (dendritic cells)with cancer biomarkers derived from or displayed by the patient'sown tumor. Precursors of the master immune cells arecontinuously circulating in a patient's blood and are obtainedthrough a blood draw. The master immune cells are then maturedand activated through a series of proprietary steps, then "educatedby exposure to the patient's tumor biomarkers, and injected backinto the patient through a simple intradermal injection in the arm orthigh, consisting ofjust a few drops.

Unlike many personalized therapies under development, DCVax®products will be costeffective. The key to their cost-effectivenessis a proprietary batch manufacturing process pioneered by NWBT,through over 10 years of development, under which a singlemanufacturing run is used to produce at least 3 years ofpersonalized treatments for a particular patient. The treatments arestored frozen in single-dose vials, ready for use on an off-the-shelfbasis for that patient. Such storage is highly reliable and low cost.By doing only one manufacturing run, and thereafter having theproduct available off-the-shelf, NWBT is able to keep the costs ofits personalized vaccines at a level that can enable product pricingin a range comparable to other cancer drugs.

In parallel with making DCVax®-Brain commercially available topatients at selected medical centers in Switzerland, NWBT is alsoconducting a Phase II pivotal trial in 141 patients in the US. Thetrial began enrolling patients in December 2006, and is anticipatedto conclude around the end of 2008 . The Company plans to seekproduct approval in both the US and EU in early 2009 , based uponthe results of the Phase II pivotal trial.

DCVax®-Brain has been granted orphan drug status in both theUS and the EU. Such status will afford DCVax®-Brain 7 years ofmarket exclusivity in the US and 10 years in the EU, ifDCVax®-Brain is the first product of its type to reach productapproval.

Clinical trial data to date in brain cancer patients have shown thatDCVax®-Brain delays disease recurrence by nearly 3-fold, from6.9 months to 18.1 months for newly diagnosed patients.DCVax®-Brain also extends these patients' survival from 14.6months to more than 33 months (and continuing - median not yetreached). The DCVax® Technology platform is anticipated to beapplicable to most cancers. NWBT is already at the Phase III,pivotal trial stage in prostate cancer, and has also received FDAclearance for clinical trials in five other cancers (including lungcancer, the leading cause of cancer deaths worldwide). Clinical


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trial data to date in hormone independent prostate cancer patientshave shown striking results similar to the results in brain cancer.

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55. Investors and the press understood the approval to be a marketing approval, and

shares more than doubled on enormous volume. In particular, the stock jumped from $2.1 per

share on a volume of 80,800 shares traded the previous day, to $7.33 per share on a volume of

3,952,900 shares traded on July 9, 2007. Defendant Boynton fostered this misunderstanding,

stating in the July 9 release: "We are delighted to be thefirst company to reach the market with

a personalized therapeutic vaccine for brain cancers, which carry a very bleak prognosis for

patients today. We look forward to providing DCVax-Brain at leading medical centers and

hospitals in Switzerland. Defendants repeated these claims in media interviews.

56. For example, on July 10, 2007, Seeking Alpha (a leading provider of stock market

opinion and analysis from blogs, money managers and investment newsletters, and a provider of

its own high-value, complementary financial content) posted the following commentary from

Dr. Ayoub (B.Sc. in Human Biology from the University of Toronto, and his Doctorate of

Medical Dentistry from Nova Southeastern University in Fort Lauderdale), the author of the

BioHealth Investor Blog, on NWBO's "Approval :

While there has been tremendous hype and controversysurrounding companies developing cancer vaccines, includingDendreon (DNDN) and Cell Genesys (CEGE), a tiny Swissbiotech company took center stage on Monday. NorthwestBioTherapeutics (NWBO.OB) announced that the Swiss Instituteof Public Health had cleared its dendretic-cell vaccine,DCVax®Brain, for commercial launch for treatment ofbraincancer.

According to the company;

In clinical trials , both newly diagnosed and recurrent brain cancerpatients treated with DCVax®-Brain had more than double thesurvival time of patients who did not receive DCVax®-Brain (toover 33 months and continuing -- median not yet reached -- fornewly diagnosed patients ). In addition, unlike chemotherapy,DCVax®-Brain does not cause any debilitating side effects.

The stock more than tripled on the news, gaining 250% to endtrading at $7.33 a share. Volume surged more than 100 times the


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3-month daily average ! What's ironic however, is the fact that thecompany is cleared to manufacture the vaccine in the U.S. andcommercialize it in Switzerland, which according to the company;

"...increasingly noted for medical tourism, and is easily accessiblefor many medical tourists.

So, it is possible that the company will produce the vaccine in theU. S., and end up selling it to Americans in Switzerland, at muchhigher prices! The company is currently conducting Phase II trialsin both the U. S. and EU, but expects final results by end of 2008.

The company is also cleared to investigate its DCVax®Technology platform in various other cancers, including a phase IIItrial for prostate cancer. This should make Dendreon investors alittle nervous. The company's DCVax® Technology hastremendous advantages over competing cancer vaccine platforms.According to the company;

DCVax® products are personalized treatments, made bycombining a patient's own master immune cells (dendritic cells)with cancer biomarkers derived from or displayed by the patient'sown tumor.

and;

DCVax® products will be cost-effective . The key to their cost-effectiveness is a proprietary batch manufacturing processpioneered by NWBT, through over 10 years of development, underwhich a single manufacturing run is used to produce at least 3years of personalized treatments for a particular patient. Thetreatments are stored frozen in single -dose vials, ready for use onan off-the-shelf basis for that patient. Such storage is highlyreliable and low cost . By doing only one manufacturing run, andthereafter having the product available off-the-shelf, NWBT is ableto keep the costs of its personalized vaccines at a level that canenable product pricing in a range comparable to other cancerdrugs.

So, not only is Northwest BioTherapeutics producing apersonalized vaccine to the individual patient, but it's also storing a3 year stock pile for that patient at low cost.

The next couple of years look to be very promising for NorthwestBioTherapeutics, but investors must be wary. Even followingMonday's jump in share price, the company still has a tiny marketcap of only $32 million. If you thought Dendreon shares are wild,think again!


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57. A week later, on July 16, 2007, the Company issued another press release

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explaining that the authorization it received was really just for import/export purposes, and was

conditional even for those limited purposes. The Company stated that the Swiss government has

not yet reviewed DCVax for neither safety nor efficacy. NWBO tried to blame the

misunderstanding on "certain media reports. The press release stated as follows:

Media Contact: Linda Powers 240-441-6047 240-497-4060

Northwest Biotherapeutics, Inc. Responds to Media Reports

BOTHELL, WA - July 16, 2007 - Northwest Biotherapeutics, Inc.(OTC BB: NWBO; AIM: NWBS and NWBT) NorthwestBiotherapeutics (the "Company or "NWBT ), following up on itspress release of July 9, 2007, wishes to address certain mediareports and provide further information on the absence of certainstock sales activity and on the regulatory status of DCVax®-Brainin Switzerland and the recent authorization obtained for theproduct from the Swiss authorities.

Certain media reports have erroneously stated that Company share-holders Toucan Capital and/or Toucan Partners have sold shares inthe Company at the time of the PIPE financing in April 2006, atthe time of the recent AIM financing, or at other times. Suchreports are incorrect. Neither Toucan Capital nor Toucan Partnershas sold shares in the Company, and, to the Company's know-ledge, neither of them has such sales pending or planned. More-over, as stated in the Company's Form 8-K filed on June 18, 2007,and the Company's AIM Admission Document dated June 18,2007, each of Toucan Capital and Toucan Partners entered into alock-up agreement with the respect to the shares of the Company'sstock held by them, pursuant to which they agreed not to sell anyshares held by them for twelve months following admission of theCompany's shares to trading on AIM on June 22, 2007.

Certain reports have also erroneously indicated that theCompany has received a Marketing Authorization from the Swissauthorities. Such reports are incorrect.

As previously announced, the Company applied to the Bundesamtf r Gesundheit ("BAG or "Office F d ral de la Sant Publique )for an Authorization for Use ("Autorisation d'exploitation ).NWBT has received such "Autorisation from the BAG as animport/export authorization ("Autorisation pour activit stransfrontali res avec des transplants ). This authorization isconditional upon certain implementation commitments thatNWBT will have to fulfill before the import/export activity canproceed (e.g., finalizing its pending arrangements for a clean-room


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suite for processing of patients' immune cells .) The process of thisfulfillment is under way.

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The Authorization will allow the Company to exportpatients'immune cells and tumor tissue for vaccine manufacturing in theUSA, and import the patients ' DCVax®Brain finished vaccineinto Switzerland.

In the BAG's processing and decision on the Company's"Autorisation application and data, Swissmedic ("Institut Suissedes Agents Th rapeutiques ) only conducted the inspection anddid not conduct any evaluation ofthe safety or efficacy ofDCVax®-Brain. Such evaluation by Swissmedic will be donewithin the assessment of a Marketing Authorization Application.The Companyplans to applyfor Marketing Authorization by theend ofthis year. A Marketing Authorization is processed anddecided by Swissmedic rather than the BAG, is not limited toselected centers, and allows full marketing and commercialization.

58. On July 20, 2007, The Microcap Speculator summed up the strange series of

events surrounding NWBO's press releases (which was repeated in the July 23, 2007 post of

Seeking Alpha as "Northwest Biotherapeutics Stock May Fade On Misleading Press Release

http://seekingalpha.com/article/41851-northwest-biotherapeutics-stock-may-fade-on-misleading-

press-release), as follows:

The strange case of Northwest Biotherapeutics (NWBO.OB) OnJuly 9, 2007, tiny Northwest Biotherapeutics: NWBO.OB issued apress release entitled "World's First Therapeutic Vaccine for BrainCancer Commercially Available to Patients in Switzerland. Therelease stated that the company received an "authorization for usefrom the Swiss authorities and that "DCVax®-Brain is the firstcommercially available therapeutic vaccine for such cancers. TheCompany intends to begin making the product available to patientsin Q3 2007.

Investors and the press understood the approval to be a marketingapproval, and shares more than doubled on enormous volume.Northwest's President and CEO Dr. Alton Boynton fostered thismisunderstanding, stating in the July 9 release that "We aredelighted to be the first company to reach the market with apersonalized therapeutic vaccine for brain cancers, which carry avery bleak prognosis for patients today. We look forward toproviding DCVax®-Brain at leading medical centers and hospitalsin Switzerland.

A week later, the company issued another press release explainingthat the authorization it received was really just for import/export



001984-11 251167V1 SOBOL SHAPIRO LLP1301 RFTH AVENUE , SUITE 2900 • SEATTLE, WA 98101


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purposes, and was conditional even for those limited purposes. Thecompany now says that the Swiss government has not yet reviewedDCVax for either safety or efficacy. Northwest tried to blame theconfusion on "certain media reports, but any fair assessment has tofault the company's misleading July 9 press release.

My take: DCVax may hold a lot of promise, but it will be yearsbefore it is truly commercialized in Switzerland or anywhere else.think the stock is likely to fade back to $2, retracing 100% of therecent rally, as investors wait for more news. Still, I'm keeping thecompany on my watchlist. This fall or winter, after the companydoes begin making the product available to patients, we will likelysee another positive press release and another spike upwards.

DISCLOSURE: No position.

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59. Similarly, The Street.com's Adam Feuerstein wrote on August 4, 2007:

Due to my relocation, I missed all the excitement over NorthwestBiotherapeutics (NWBO - Cramer's Take - Stockpickr) and itsDCVax brain cancer vaccine. This bulletin board stock went from$2 to $7 on news (or should I say "confusion ) of the vaccine'sapproval in Switzerland.

A lot of you emailed to get my thoughts. Sorry for not being moretimely, but DCVax doesn't impress. The Swiss approval thing isreally not a big deal, just a way for Northwest Bio to export thevaccine for use there under tightly controlled circumstances. Thisis nowhere close to what would normally be defined as a drugapproval in the United States or Europe. And the available clinicaldata on DCVax is limited and not very impressive.

It looks like Northwest Bio is heading straight back into the $2-$3range, so the good times appear to be over. Congratulations if you


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TFI FPHC)NF 190AI A91- 7999 • FAC: SIMII F 190AI A91-059d

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traded in and out of the stock and made money, but this is not astock for fundamental biotech investors.

http://www.thestreet. com/s/feuersteins-biotech-stock-mailbag/newsanalysis/biotech/ 103 72267_2.html

60. On August 13, 2007, NWBO received a letter of non-public informal inquiry from

the SEC regarding the events surrounding its application for Swiss regulatory approval and

related press releases dated July 9, 2007 and July 16, 2007.

61. On August 23, 2007, Jim D. Johnston notified the Company of his resignation

from his positions of Chief Financial Officer and General Counsel of the Company, and as a

member of the Board of Directors and all committees thereof, each effective on August 28, 2007.

The Company kept this resignation of the General Counsel who joined the Company in March

2007, quiet until August 29, 2007, when it filed its Form 8-K with the SEC.

62. The market for NWBO's Common Stock was open, well-developed and efficient

I at all relevant times. As a result of these materially false and misleading statements and failures

to disclose, NWBO's Common Stock traded at artificially inflated prices during the Class Period.

Lead Plaintiff and other members of the Class purchased or otherwise acquired NWBO Common

Stock relying upon the integrity of the market price ofNWBO's Common Stock and market

information relating to NWBO, and have been damaged thereby.

63. During the Class Period, Defendants materially misled the investing public,

thereby inflating the price ofNWBO's Common Stock, by publicly issuing false and misleading

statements and omitting to disclose material facts necessary to make Defendants' statements, as

set forth herein, not false and misleading. Said statements and omissions were materially false

and misleading in that they failed to disclose material adverse information and misrepresented

the truth about the Company, its business and operations, as alleged herein.

64. At all relevant times, the material misrepresentations and omissions particularized

in this Complaint directly or proximately caused or were a substantial contributing cause of the

damages sustained by Lead Plaintiff and other members of the Class. As described herein,



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during the Class Period, Defendants made or caused to be made a series of materially false or

misleading statements about NWBO's business, prospects and operations. These material

misstatements and omissions had the cause and effect of creating in the market an unrealistically

positive assessment ofNWBO and its business, prospects and operations, thus causing the

Company's Common Stock to be overvalued and artificially inflated at all relevant times.

Defendants' materially false and misleading statements during the Class Period resulted in Lead

Plaintiff and other members of the Class purchasing the Company's Common Stock at

artificially inflated prices, thus causing the damages complained of herein.

VIII. FALSITY

65. In reality, the actual application referred to by Defendants in their April and July

press releases was submitted in February 2007 and approval was received in late June 2007.

Rather than an authorization for use, NWBO received from the Bundesamt f r Gesundheit

("BAG or "Office F d ral de la Sant Publique ) an import/export authorization ("Autorisation

pour activit s transfrontali res avec des transplants ). This authorization was conditional upon

certain implementation commitments that NWBO would have to fulfill before the import/export

activity could proceed (e.g., finalizing its pending arrangements for a clean-room suite for

processing of patients' immune cells) and did not allow NWBO to market or commercially sell

DCVax®-Brain. The decision of the BAG was merely based on an inspection of facilities and

did not address either the safety or efficacy of the product. NWBO still needed to file for a

Marketing Authorization. NWBO kept this application quiet between February and April, and

kept the approval quiet from the public in late June, until July 9, 2007. Given that Defendants

April 17, 2007 press release indicated such an approval would be a material event, and the

July 9, 2007 press release indicates the same, if it was truly material it should have been reported

immediately to the public, but it was not. For these and the following reasons, the statements in

the April 17 and the June 9 press releases were false and misleading:


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a. The Company never applied for any marketing or commercialization authority.

Rather, it applied for, what is called in Switzerland, as a "Autorisation d'exploitation pour le

trafic transfrontalier de transplants that is available solely from the OFSP, or the Office F d ral

de la Sant Publique ("OFSP or "BAG ), which is an operation license for "anyone who

imports or exports transplants or places transplants on the market abroadfrom Switzerland.

This is a license granted under Arrested on blood control, Art. 18 ([ RS 818.111 ]); Ordonnance

sur le contr le des transplants, art. 18 ([RS 818,111]); Control Ordinance transplants, art. 24, art.

24, Art. 29 - 31 ([ RS 818.111.3 ]) 29 - 31 ([RS 818.111.3]). It takes only 2 to six months to

process such a license and is granted by the a letter of application with CV of the person

responsible leader, signed and dated (according ordinance RS 818.111.3, art. 24 letter. A).

b. The Company also never applied for an Authorization of Use with either the

Office F d ral de la Sant Publique ("BAG ) or the l'Institut suisse des produits th rapeutiques

("Swissmedic ). Defendants' liberal translation of the "Autorisation d'exploitation pour le trafic

transfrontalier de transplants could only have been meant to confuse, as there are no

Authorizations of Use granted by BAG and only two by Swissmedic.

(1) One is the "Autorisation de mise sur le march de in dicaments

pr is l'emploi (where l'emploi means "use in this context). This literally

means an "Authorization for marketing of medicines ready for use , or Certifi-

cate of Approval, and seeks a license to use drugs ready to use in human or ani-

mals, much like approval of a drug by the FDA in the United States. Swissmedic

will verify that the applicant meets the conditions attached to the granting of a

permit, and considers the scientific and administrative units (pharmaceutical

quality, toxicology, pharmacology and clinical trials) of the accompanying

documentation. The decision is made, if necessary, with the assistance of

Medicines Expert Committee (radiopharmaceuticals: Joint Committee of

Experts for radioactive drugs) or Veterinary Expert Committee and other outside


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experts. The application is by a form of letter and must include documentation

attesting to the quality, safety, and efficacy of the drug. Action takes approxi-

mately 200-400 days. This is the Authorization Defendants have called the

"Authorization for Commercialization which they said they would apply for

latter in the year when they made their corrective disclosure on July 16, 2007.

(2) The other "Authorization for Use is also solely available from

Swissmedic and is called the "Autorisations de mise sur le march pour une

dur e limit e de m dicaments pr is l'emploi or "Autorisations de mise sur le

march pour une dur e limit e de m dicaments pr is l'emploi "Authorization

for marketing for a limited period of medicines ready for use. This

authorization is for the distribution and delivery of medicines against deadly

diseases that are not allowed to be placed on the market if such authorization is

consistent with the protection of health, a great therapeutic utility is expected

from the administration of these drugs and that there is no equivalent drug.

Defendant do not claim to have sought this authorization.

(3) The Company neither had applied for nor received authorization

to market or commercialize the drug.

66. The following chart compares the companies statement on April 17, 2007 to the

I closer truth admitted on July 16, 2007:

Statement on April 17, 2007: Corrections on July 16, 2007:

Northwest Biotherapeutics Files for As previously announced, the CompanyAuthorization for Use of DCVax(R)-Brain applied to the Bundesamt f r Gesundheitfor Commercialization in Switzerland ("BAG or "Office F d ral de la Sant

Publique ) for an Authorization for Use("Autorisation d'exploitation ). NWBThas received such "Autorisation fromthe BAG as an import/exportauthorization ("Autorisation pour


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activit s transfrontali res avec destransplants ).

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If approved, Northwest Biotherapeutics willbe authorized to commercialize, market andimport/export DCVax(R)-Brain for thetreatment of patients at selected centers inSwitzerland.

The application, submitted to the SwissInstitute of Public Health or Bundesamt furGesundheit (BAG), will be reviewed by theBAG and Swissmedic.

We are excited to achieve a major milestoneof our corporate strategy, and to have thepossibility of bringing one ofthefirstpersonalized therapies to market on ahighly cost-effective basis.

We look forward to preparing for thecommercial use of DCVax(R Brain atleading medical centers in Switzerland laterthis year, and soon afterwards in othercountries.

Switzerland is an attractive place to begincommercialization due to its highlyrespected regulatory oversight

Certain reports have also erroneouslyindicated that the Company has receiveda Marketing Authorization from theSwiss authorities. Such reports areincorrect.

In the BAG's processing and decision onthe Company's "Autorisationapplication and data, Swissmedic("Institut Suisse des AgentsTh rapeutiques ) only conducted theinspection and did not conduct anyevaluation ofthe safety or efficacy ofDCVax®-Brain. Such evaluation bySwissmedic will be done within theassessment of a Marketing AuthorizationApplication . The Companyplans toapplyfor Marketing Authorization bythe end ofthis year. A MarketingAuthorization is processed and decidedby Swissmedic rather than the BAG, isnot limited to selected centers, and allows

This authorization is conditional uponcertain implementation commitmentsthat NWBT will have to fulfill before theimport/export activity can proceed (e.g.,finalizing its pending arrangements for aclean-room suite for processing ofpatients' immune cells.) The process ofthis fulfillment is under way.

The Authorization will allow theCompany to exportpatients ' immunecells and tumor tissue for vaccinemanufacturing in the USA, and importthepatients ' DCVax®Brain finishedvaccine into Switzerland.

The Companyplans to applyforMarketing Authorization by the end ofthis year. A Marketing Authorization isprocessed and decided by Swissmedicrather than the BAG, is not limited toselected centers, and allows full


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67. The following chart compares the statements in the June 9, 2007 press release

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with the closer truth in the June 16th admission:

Statement on June 9, 2007:

World's First Therapeutic Vaccine for BrainCancer Commercially Available to Patientsin Switzerland

Swiss "Authorization for Use Approved forDCVax®-Brain

Northwest Biotherapeutics, Inc. (OTC BB:NWBO.US; AIM: NWBS and NWBT), ispleased to announce that it has receivedAuthorization for Use from the SwissInstitute of Public Health (Bundesamt f rGesundheit; "BAG ) to make DCVax®-Brain commercially available for treatmentof brain cancer patients in Switzerland. Assuch, DCVax®-Brain is the firstcommercially available therapeutic vaccinefor such cancers. The Company intends tobegin making theproduct available topatients in Q3 2007.

Dr. Alton Boynton, President and CEO ofNorthwest Biotherapeutics, said: " We aredelighted to be thefirst company to reachthe market with a personalized therapeuticvaccinefor brain cancers, which carry avery bleak prognosis forpatients today. Welookforward to providing DCVax® Brainat leading medical centers and hospitals inSwitzerland Switzerland is an attractiveplace to begin commercialization , due to itshighly respected regulatory oversight, and itsgrowing experience with cellular therapies.

"Finally, we are especially pleased toachieve such a major milestonesubstantially ahead ofschedule and so soonafter our flotation on the AIM market of theLondon Stock Exchange.

Corrections on July 16, 2007:

Certain reports have also erroneouslyindicated that the Company has receiveda Marketing Authorization from theSwiss authorities. Such reports areincorrect.

As previously announced, the Companyapplied to the Bundesamt f r Gesundheit("BAG or "Office F d ral de la SantPublique ) for an Authorization for Use("Autorisation d'exploitation ). NWBThas received such "Autorisation from theBAG as an import/export authorization("Autorisation pour activit stransfrontali res avec des transplants ).This authorization is conditional uponcertain implementation commitmentsthat NWBT will have to fulfill before theimport/export activity can proceed (e.g.,finalizing its pending arrangements for aclean-room suite for processing ofpatients' immune cells.) The process ofthis fulfillment is under way.

The Authorization will allow theCompany to exportpatients' immunecells and tumor tissue for vaccinemanufacturing in the USA, and importthepatients ' DCVaxBrain finishedvaccine into Switzerland.

In the BAG's processing and decision onthe Company's "Autorisation applicationand data, Swissmedic ("Institut Suisse desAgents Th rapeutiques ) only conductedthe inspection and did not conduct anyevaluation ofthe safety or efficacy ofDCVax®-Brain. Such evaluation bySwissmedic will be done within theassessment of a Marketing AuthorizationApplication. The Companyplans toapplyfor Marketing Authorization bythe end ofthis year. A Marketing


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by Swissmedic rather than the BAG, isnot limited to selected centers, and allowsfull marketing and commercialization.

In parallel with making DCVax®-Brain The Companyplans to applyforcommercially available to patients at Marketing Authorization by the end ofselected medical centers in Switzerland, this year. A Marketing Authorization isNWBT is also conducting a Phase II pivotal processed and decided by Swissmedictrial in 141 patients in the US. rather than the BAG, is not limited to

selected centers, and allows fullmarketing and commercialization.

IX. ADDITIONAL SCIENTER ALLEGATIONS

68. As alleged herein, Defendants acted with scienter in that Defendants knew that

the public documents and statements issued or disseminated in the name of the Company were

materially false and misleading; knew that such statements or documents would be issued or

disseminated to the investing public; and knowingly and substantially participated or acquiesced

in the issuance or dissemination of such statements or documents as primary violations of the

federal securities laws. As set forth elsewhere herein in detail, Defendants, by virtue of their

receipt of information reflecting the true facts regarding NWBO, their control over, and/or

receipt and/or modification ofNWBO's allegedly materially misleading misstatements and/or

their associations with the Company which made them privy to confidential proprietary

information concerning NWBO, participated in the fraudulent scheme alleged herein.

69. As noted above, Defendants had a motive to hype the stock as they were in dire

need of financing, Linda Powers' Toucan Partners was the largest shareholder in NWBO (now

owning 52,762,495 shares) and had loaned the Company millions of dollars, and, accordingly,

NWBO needed to attract outside investors and capital. It did this in April through June, and at

the same time, became listed on the London Stock exchange in late June which would help

Defendants obtain more liquidity for NWBO stock and allow them to sell shares . Indeed

Defendants acknowledged the timing when they stated in their July 16 press release:


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Finally, we are especially pleased to achieve such a majormilestone substantially ahead of schedule and so soon after ourflotation on the AIM market ofthe London Stock Exchange.

70. In addition, Linda Powers has admitted publicly, in an interview with Saul

Albom, that NWBO filed its so-called "Authorization for Use in February 2007 and received

approval in June 2007 while it was still in the process of raising cash, restructuring debt, and

obtaining its listing on the London Stock Exchange. Nevertheless, NWBO kept this so-called

"major milestone a secret until after these financial events were closed. Similar, no Current

Report on Form 8-K was issued and filed wit the SEC, which is required for all material events.

Both of these support an inference that Defendants knew these were not material events, but

needed time to figure out how to disclose this approval once it occurred. It is likely that since

Defendants had built the "Application up so much that investors pressured them to release the

news, or Defendants hoped to take advantage of a trumped up significance of these events to sell

stock, but were caught before they could act. In any event, the failure to disclose a material

event in June would be in and of itself inexcusable and fraudulent.

71. Toucan Capital and Toucan Partners acted with scienter because Linda Powers

was Toucan Capital's managing director and Toucan Partners' managing member. Indeed,

Toucan Capital and Toucan Partners used their control over NWBO to install Powers into

various senior NWBO positions, as alleged supra at ¶ 9, so that Toucan Capital and Toucan

Partners, acting through Powers, could protect their investment by controlling NWBO and being

informed ofNWBO's circumstances and actions.

X. APPLICABILITY OF PRESUMPTION OF RELIANCE:FRAUD ON THE MARKET DOCTRINE

72. At all relevant times , the market for NWBO' s Common Stock was an efficient

market for the following reasons, among others:

73. NWBO stock met the requirements for listing, and was listed and actively traded

on a highly efficient and automated market;


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74. As a regulated issuer , NWBO filed periodic public reports with the SEC;

75. NWBO regularly communicated with public investors via established market

communication mechanisms, including through regular distribution of press releases on the

national circuits of major newswire services and through other wide-ranging public disclosures,

such as communications with the financial press and other similar reporting services; and

76. NWBO was followed by several securities analysts employed by major brokerage

firms who wrote reports which were distributed to the sales force and certain customers of their

respective brokerage firms. Each of these reports was publicly available and entered the public

marketplace.

77. Because of the foregoing, the market for NWBO's Common Stock promptly

digested current information regarding NWBO from all publicly available sources and reflected

such information in NWBO's stock price. Under these circumstances, all purchasers of

NWBO's Common Stock during the Class Period suffered similar injury through their purchase

ofNWBO's Common Stock at artificially inflated prices and a presumption of reliance applies.

XI. NO SAFE HARBOR

78. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this Complaint.

Many of the specific statements pleaded herein were not identified as "forward-looking

statements when made. To the extent there were any forward-looking statements, there were no

meaningful cautionary statements identifying important factors that could cause actual results to

differ materially from those in the purportedly forward-looking statements. Alternatively, to the

extent that the statutory safe harbor does apply to any forward-looking statements pleaded

herein, Defendants are liable for those false forward-looking statements because at the time each

of those forward-looking statements was made, the particular speaker knew that the particular

forward-looking statement was false, and/or the forward-looking statement was authorized


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and/or approved by an executive officer ofNWBO who knew that those statements were false

when made.

XII. LOSS CAUSATION/ECONOMIC LOSS

79. During the Class Period, as detailed herein, Defendants engaged in a scheme to

deceive the market and a course of conduct that artificially inflated NWBO's stock price and

operated as a fraud or deceit on Class Period purchasers ofNWBO stock by misrepresenting the

Company's operating success and future business prospects. Defendants achieved this fa ade of

success, growth and strong future business prospects by blatantly misrepresenting the selling

success of the Company's products. Later, however, when Defendants' prior misrepresentations

and fraudulent conduct were disclosed and became apparent to the market, NWBO stock fell

precipitously as the prior artificial inflation came out ofNWBO's stock price. As a result of

their purchases ofNWBO stock during the Class Period, Lead Plaintiff and other members of the

Class suffered economic loss, i.e., damages, under the U. S. federal securities laws.

80. In particular, immediately after Defendants issued their false press release on

April 17, 2007, NWBO's stock jumped from $1.95 per share to $3.45 per share on April 19,

2007, reflecting an inflation of over 90% or $1.77 per share. Then, again, on July 9, 2007, when

Defendants issued their second fraudulent press release, NWBO stock jumped from $2.1 per

share to $7.33 per share, or 49 times the previous day's volume, or almost 250%, reflecting

artificial inflation. Then, as the market began to digest the truth of Defendants' statements the

stock price began to decline, decreasing some of the artificial inflation and causing losses to the

investors who had purchased during the Class Period. When Defendants came out with their

corrective disclosure on July 16, 2007, the stock plummeted from $4.95 on July 13 to close at

$3.15 on July 18, causing a further loss to investors who purchased during the Class Period.


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COUNT I

Violation of Section 10(b) of the Exchange Act of 1934 andRule lOb-5 Promulgated Thereunder Against All Defendants

81. Lead Plaintiff incorporates each allegation contained above as if fully set forth

82. During the Class Period, Defendants disseminated or approved the materially

false and misleading statements specified above, which they knew or deliberately disregarded

were misleading in that they contained misrepresentations and failed to disclose material facts

necessary in order to make the statements made, in light of the circumstances under which they

were made, not misleading.

83. Defendants (a) employed devices, schemes, and artifices to defraud; (b) made

untrue statements of material fact and/or omitted to state material facts necessary to make the

statements not misleading; and (c) engaged in acts, practices, and a course of business which

operated as a fraud and deceit upon the purchasers of the Company's Common Stock during the

Class Period.

84. Lead Plaintiff and the Class have suffered damages in that, in reliance on the

integrity of the market, they paid artificially inflated prices for NWBO Common Stock. Lead

Plaintiff and the Class would not have purchased NWBO Common Stock at the prices they paid,

or at all, if they had been aware that the market prices had been artificially and falsely inflated by

Defendants' misleading statements.

85. As a direct and proximate result of Defendants' wrongful conduct, Lead Plaintiff

and the other members of the Class suffered damages in connection with their purchases of

NWBO Common Stock during the Class Period.


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Lead Plaintiff demands a trial by jury.


001984-11 251167V1

COUNT II

Violation of Section 20(a) of the Exchange Act of 1934Against the Non-Issuer Defendants

86. Lead Plaintiff incorporates each allegation contained above as if fully set forth

87. The Non-Issuer Defendants (defined supra at ¶ 13) acted as controlling persons of

NWBO within the meaning of Section 20(a) of the Exchange Act as alleged herein. Because of

their positions as officers and/or directors ofNWBO, and their ownership ofNWBO stock, the

Non-Issuer Defendants had the power and authority to cause NWBO to engage in the wrongful

conduct complained of herein. Because of such conduct, the Non-Issuer Defendants are liable

pursuant to Section 20(a) of the Exchange Act.

PRAYER FOR RELIEF

WHEREFORE, Lead Plaintiff prays for relief and judgment, as follows:

A. Determining that this action is a proper class action, designating Lead Plaintiff as

Lead Plaintiff and certifying Lead Plaintiff as a class representative under Rule 23 of the Federal

Rules of Civil Procedure and Lead Plaintiffs counsel as Lead Counsel;

B. Awarding compensatory damages in favor of Lead Plaintiff and the other Class

members against all Defendants, jointly and severally, for all damages sustained as a result of

Defendants' wrongdoing, in an amount to be proven at trial, including interest thereon;

C. Awarding Lead Plaintiff and the Class their reasonable costs and expenses

incurred in this action, including counsel fees and expert fees; and

D. Such other and further relief as the Court may deem just and proper.

JURY DEMAND




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DATED this 1st day of August, 2008.

HAGENS BERMAN SOBOL SHAPIRO LLP

By /s/ Steve W. BermanSteve W. Berman, WSBA #12536

1301 Fifth Avenue, Suite 2900Seattle, Washington 98101Telephone: (206) 623-7292Facsimile: (206) 623-0594

Reed R. Kathrein715 Hearst Avenue, Suite 202Berkeley, California 94710Telephone: (510) 725-3000Facsimile: (510) 725-3001


001984-11 251167V1




CERTIFICATION OF NAMED PLAINTIFFPURSUANT TO FEDERAL SECURITIES LAWS

Russell Subia ("Plaintiff') declares as to the claims asserted under the federal

securities laws, that:

1. Plaintiff has reviewed a complaint alleging securities fraud against

Northwest Biotherapeutics, Inc. and authorized its filing.

2. Plaintiff did not acquire the security that is the subject ofthis action at the

direction ofPlaintiff's counsel in order to participate in this private action or any other

litigation under the federal securities laws.

3. Plaintiff is willing to serve as a representative party on behalf of the

class, including providing testimony at deposition and trial, if necessary.

4. Plaintiffhas made no transaction(s) during the Class Period in the debt or

equity securities that are the subject of this action except those set forth below:

Acquisitions Date Acquired No. Shares Acquisition PriceAcquired Per Share

NWBO

PtAj

- 13-C1 0O S 5.05('0133 ,-OWK (& 5-4

5. During the three years prior to the date of this Certificate, Plaintiff has

not sought to serve or served as a representative party for a class in the following

actions filed under the federal securities laws except as detailed below:

6. Plaintiff will not accept any payment for serving as a representative party

on behalf of the class beyond the Plaintiff's pro rata share of any recovery, except

such reasonable costs and expenses (including lost wages) directly relating to the

representation of the class as ordered or approved by the court.

I declare under penalty of perjury that the foregoing is true and correct.

Executed this day of 2007.

Russell Subia

-2-

Please fill out the additional information. Thank you.

Name (print): Russell Subia

Address: 1212 So Eddy StreetPecos, TX 79772

County of Residence:

Daytime Phone No.: (432) 447-2270

Evening Phone No.:

-3-

Documents

In Re Northwest Biotherapeutics Inc. Securities Litigation 07-CV …securities.stanford.edu/filings-documents/1037/NWBO_01/... · 2008-08-26 · 22 Ln - 22 Ln - - Ln cv a o o r r