Ms. Powers refers to Northwest Bio CEO Linda Powers, who owns approximately 40% of the company via some intertwined entities, including the company that manufactures DCVax. Smith believes Power's large ownership stake in Northwest Bio proves she has "skin in the game."

A more believable and less optimistic explanation: Powers can't convince institutional investors to buy the stock because they've checked out DCVax and found it lacking credibility. Retail investors, on the other hand, are more easily persuaded, thanks in part to articles promoting the company like those written by Smith.

Smith should know better given his past experience working on Wall Street. Hidden gems in the biotech sector, if they exist at all, don't remain hidden for long. Northwest Bio has been toiling in the dark for years -- and for good reason.

Adjust for last fall's 1-for-16 reverse stock split and Northwest Bio today is a 21-cent stock. The company's market value is a measly $85 million even with DCVax in a phase III study for GBM. Investors have looked at Northwest Bio and passed. Potential development and marketing partners -- Big Pharma companies eager and willing to write big checks for licensing promising new drugs -- have also looked over Northwest Bio and passed.

The Feuerstein-Ratain Rule hasn't been proven wrong yet and is unambiguous about Northwest Bio: DCVax will fail.

Smith believes otherwise. We'll see who's right eventually.

-- Reported by Adam Feuerstein in Boston.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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