Northwest Biotherapeutics, a publicly traded pharmaceutical company based in Bethesda, is planning to conduct an investigation into allegations of poor governance at the request of a prominent shareholder.
Neil Woodford, a biotech investor whose fund acquired a 28 percent stake in Northwest, last week sent a letter to the company’s board of directors proposing it create an independent board position and fill the post with Elliott Leary, a former FBI agent who is now managing director at a risk management firm.
Woodford urged the board to convene an independent committee to investigate “various allegations of financial improprieties and regulatory failure that have been published by at least one anonymous source.”
Northwest said Monday that it “welcomes Neil Woodford’s call for an independent investigation,” saying its board is meeting this week to consider the matter. The company said it has interviewed Leary for the board position.
“The interview and consideration process for a new Board seat is well under way with Mr. Woodford’s candidate, Mr. Elliott Leary,” the company said in a statement. “Our Board is hoping to meet with him again in the next couple of days, and to promptly complete the process.”
Woodford’s request follows a scathing report released in late October by market research firm Phase Five Research. The unsigned report accuses Northwest Biotherapeutics chief executive Linda Powers of “unscrupulously using the company as her personal checking account” in financial dealings with entities related to her, among other allegations.
In an interview, Powers said the allegations were unfounded.
“In America today if you’re a publicly traded biotech company you’re very vulnerable to a whole array of predatory attacks by hedge funds and similar players to use those attacks to manipulate your stock, to delay or obstruct your clinical progress, and for them to profit in various ways through stock manipulation,” Powers said Tuesday.
In a reposting of the report on the financial Web site Seeking Alpha, Phase Five disclosed that it held a short-term position in Northwest Biotherapeutics. In an e-mail to The Washington Post, a spokesman for Phase Five Research, who declined to be identified, would not disclose the identity of the author of the report and declined to comment on its shareholder status in Northwest Biotherapeutics.
Northwest Biotherapeutics is a biotechnology company focused on developing immunotherapy products to treat cancers, all of which have yet to be approved by the Food and Drug Administration. Its lead candidate is in a phase-three trial to treat people with a lethal form of brain cancer known as Glioblastoma multiforme or GBM.
The company’s shares, which topped $12 a share in July, closed Tuesday at $4.90, up 6.1 percent.