March 28, 2015

Why I Remain Long Provectus Biopharmaceuticals

§  My investment thesis is intact. Up until this point FDA regulatory clarity had been lacking and therefore commercial validation was absent despite compelling clinical and business value propositions of Provectus’ Rose Bengal-based investigational oncology and dermatology compounds PV-10 and PH-10, respectively. Company management achieved regulatory clarity. Commercial validation should follow. Thus, I remain long the stock. 
§  The first pathway to oncology approval for ablative immunotherapy PV-10 is the pivotal Phase 3 trial of PV-10 as a monotherapy versus systemic chemotherapy for Stage IIIB and Stage IIIC patients with unresectable locally advanced cutaneous melanoma. If successful, PV-10 would become the standard of care for this patient population. 
§  The oncology clinical development program should expand this year with first, a Phase 1b/2 trial of PV-10 in combination with immune checkpoint inhibition for patients with advanced melanoma, and second,a domestic pivotal trial of PV-10 as a monotherapy versus sorafenib for patients with hepatocellular carcinoma and cancer metastatic to the liver. The program’s expansion asserts PV-10’s multi-indication viability, utility across disease stage spectrum, and functionality as a monotherapy as well as in combination with other treatments. 
§  Regulatory clarity from U.S. and local international regulators should facilitate commercial validation, such as geographic PV-10 licenses in China, India and/or other countries. A key element of these relationships should be joint undertakings with commercial partners of Phase 1b/2 trials of PV-10 as a monotherapy versus each region’s standard of care for patients with hepatocellular carcinoma and cancer metastatic to the liver, thus further expanding the clinical development program in 2016. 
§  Inflammatory dermatoses therapeutic PH-10 finally should garner more public attention. A Phase 2 mechanism of action study began in January. The issuance of a key patent followed in March, and interestingly may suggest non-dermatology applications of PH-10. Together with several completed preclinical toxicity studies, clinical mechanism data due by year-end should facilitate FDA discussions about consensus pivotal Phase 3 trial designs for psoriasis and/or atopic dermatitis. The protocol(s) and regulatory clarity may help the Company secure a global or regional license deal for PH-10 in 2016. 
§  More data should be presented, published and available for due diligence in 2015, such as liver cancer (clinical), PV-10’s mechanism (clinical), PV-10 in combination with immune checkpoint inhibition (preclinical), and PV-10 in combination with external beam radiation therapy (clinical). Mechanism, overall survival-focused liver data and interim melanoma Phase 3 data would affirm that complete response of cancerous tumors after PV-10 injection results in the disease staying away. 
§  Favorable pharmaceutical industry trends should further improve Provectus’ M&A valuation prospects. Big Pharma oncology franchises are separating into those with immune checkpoint inhibition that understand the need for an immune system primer to assist their inhibitors, those with inhibitors that don’t fully embrace this need, and those who have a stimulatory compound, an inhibitor or neither and know they need a matching set to remain relevant.
My investment thesis remains intact

The value proposition of Provectus’ two Rose Bengal-based drugs — intratumorally injected PV-10 for oncology (a 10% solution of Rose Bengal) and topically applied PH-10 for dermatology (a 0.001% to 0.01% gel of the active pharmaceutical ingredient) — is compelling: pristine safety profiles, well tolerated treatments easily administered to and compliable for patients, ready-made products with probable high gross margins inexpensively manufactured at scale, and the potential to fully serve vast addressable markets of unmet needs very profitably over time. Increasing amounts of medical and scientific data as well as independent validation of results and claims confirm the Company’s intrinsic value.

From inception through this year Knoxville, Tennessee-based Provectus Biopharmaceuticals, Inc.[1] (“Provectus” or the “Company”) (NYSE MKT: PVCT) was best described as an early-stage drug development company. Provectus was founded in 2002 by three scientists from nearby Oak Ridge National Laboratory, a U.S Department of Energy (“DOE”) multi-program science and technology facility with a rich history of discovery and innovation (and a member of the DOE network of laboratories that includes Lawrence Berkeley, Lawrence Livermore, Los Alamos, and Sandia). Up until now the Company had been developing PV-10 and PH-10 with no regulatory clarity (i.e., discernible, initial pathways to approval).

Rose Bengal is a unique compound with an extensive and very long clinical history. A water-soluble dye originally created by Gnehm in 1882[2], it has a molecular weight of approximately 1,000 Daltons, which effectively makes it a small molecule. Rose Bengal’s century of prior clinical use includes being added to Safranin Victoria Yellow for treating ocular pneumococcal infection (Römer, 1914)[3], a stain for visualizing corneal ulcers (Kleefeld, 1919)[4], and a marker for observing impaired liver function (Delprat, 1925)[5]. It also has an established FDA safety profile as an intravenous hepatic diagnostic (Robengatope®) as well as a topical ophthalmic diagnostic (Rosettes® and Minims®). To date there are 3,696 medical literature citations of Rose Bengal[6], 233 related to cancer[7]. Rose Bengal’s therapeutic benefits remained hidden until the 1980s when the FDA and the Japanese Ministry of Health and Welfare began scrutinizing artificial food colorings. Japanese researchers evaluated the tumorigenicity of red food dye No. 105 (also made from Rose Bengal), and observed dose-dependent survival increased in the mice receiving it.[8]

In 1998 Provectus’ multi-disciplinary team of founders — a molecular virologist (Dr. Craig Dees, Ph.D.), a chemical engineer (Dr. Timothy Scott, Ph.D.) and an organic chemist (Dr. Eric Wachter, Ph.D.) — looking for drug candidates having antineoplastic activity also happened to come across Rose Bengal.[9] A commercial data search by the former Oak Ridge scientists identified numerous candidates. Subsequent proprietary screening promptly zeroed in on Rose Bengal and other members of the halogenated xanthene family. Preclinical tests with bacterial and cancer cell lines quickly demonstrated Rose Bengal’s impressive cytotoxic activity. Subsequent animal and human studies confirmed Rose Bengal delivered directly into tumors by injection was a selective and potent agent for ablating cancers and harnessing the immune system.

PV-10’s therapeutic value, established preclinically and clinically by Provectus, has been independently repeated and reproduced by affiliated and unaffiliated investigators and researchers around the world:
  • Dual ablative and immunotherapeutic mechanisms of action: Primary ablation in 1 to 2 hours that kills cancer tumors into which PV-10 is injected by selectively passing through cell membranes and accumulating in lysosomes to force cell death with no biochemical action or effect, and secondary immunomodulation in 1 to 2 weeks where cell death resulting from local tumor injection attracts tumor-specific T-cells and causes an up-regulating immune effect, which leads to a systemic, tumor-specific immune response in untreated tumors and distant disease[10],
  • Simple to store, handle, and use and reuse[11],
  • Modest local toxicity predominantly confined to the injection site, and minimal to no systemic toxicity11, [12], [13],
  • Rapid, durable and complete tumor destruction, as well as induction of antigen release in injected lesions11, 13,
  • Prompt, complete healing of injected lesion sites after tumor destruction11,
  • Reliable, reproducible induction of loco-regional and systemic immune effects capable of destroying occult tumor cells, untreated lesions and distant metastatic lesions regardless of prior therapies and treatments 11, [14],
  • Multi-indication viability: Up to 260 cancer patients treated with PV-10 — 12 in a recurrent breast cancer Phase 1 trial, 6 in a liver cancer Phase 1 trial, 100 in melanoma Phase 1 and 2 trials, 15 in a melanoma Phase 1 mechanism study, 100 patients having cutaneous and subcutaneous tumors irrespective of indication treated through 2013 in Provectus’ compassionate use program (“CUP”), and up to 25 in an investigator-initiated melanoma study of PV-10 in combination with external beam radiation therapy (“XRT”)14, [15]. The Company has not yet reported patient numbers for the expanded liver cancer Phase 1 trial and in the CUP in 2014,
  • Orthogonality (i.e., low clinically relevant drug-drug interaction)[16] and synergy with other therapies and therapeutics: targeted therapy16, systemic chemotherapy[17], XRT[18], and immune checkpoint inhibition[19], [20], and
  • Third-party validation[21]: Apoptosis, tissue and cell selectivity, clinically relevant loco-regional and systemic effects, tumor-specific immunity, T-cell engagement, immune-mediated response, multi-indication viability.
The initial pathway to approval is set

Provectus’ pivotal melanoma Phase 3 trial should begin treating patients in April. The trial tests the hypothesis that complete response (“CR”) of melanoma lesions after PV-10 injection results in melanoma staying away.[22] The trial’s patient population should be the same as the patient subgroup in the Company’s Phase 2 trial that received PV-10 injection of all existing melanoma. The subgroup achieved progression-free survival (“PFS”) under modified RECIST of more than 9.8 months, a complete response rate (“CRR”) of 50% and loco-regional disease control (complete response [“CR”] + partial response [“PR”] + stable disease) of 82% despite receiving a limited number of injections over a limited period of time. An initial injection and up to three more [if needed] were delivered to a patient’s lesion during the first 16 weeks of the trial. The majority of lesions in the subgroup achieved CR with only 1 or 2 injections.[23], [24]

By accepting the registration study’s design and protocol[25] — 225 patients, a primary endpoint of PFS, a comparator of systemic chemotherapy (dacarbazine), and secondary endpoints of CRR, overall survival (“OS”) and the number of adverse events — the FDA acknowledged this intratumorally delivered agent may have a meaningful role to play in the treatment of the systemic disease that is melanoma. The Phase 3 trial will have no restriction on the number of injections a patient’s lesions may receive (which benefits PFS and CRR), the number of lesions a patient may have treated (which benefits OS) or the time over which injections are provided (which benefits PFS, CRR and OS). There is an imperfect trial inclusion criterion: Patients must have failed or not be a candidate for at least one systemic immunotherapy (Bristol-Myers’ ipilimumab, Merck’s pembrolizumab and Bristol-Myers’ nivolumab).

The Agency’s recognizes the severity of loco-regional melanoma and need for better patient treatment options. In October 2014 the FDA requested public comment on “[m]elanoma, specifically unresectable loco-regional disease.”[26] The Agency also accepted Amgen’s biologics license application for intralesional agent and oncolytic virus talimogene laherparepvec (referred to as T-Vec), setting a Prescription Drug User Fee Act date of October 27, 2015. An April 29, 2015 meeting of FDA advisory committees should elucidate the Agency’s views about T-Vec, especially given questions surrounding its pivotal melanoma Phase 3 trial’s comparator (GM-CSF) and endpoints (durable response rate), and the potential deleterious effects of viral shedding[27].

Management has endeavored to build value in Provectus’ fully owned cancer and dermatology assets (unsuccessfully thus far when measured by the Company’s current market capitalization) by differentiating PV-10 and PH-10’s product profiles, innovating unique mechanisms of action (outsourced to Moffitt Cancer Center [“Moffitt”] and rumored Rockefeller University for independent explanation of oncology and dermatology, respectively), demonstrating best-in-class efficacy, persevering in their discussions with the Agency to establish new standards of care (management acknowledged they did not fully listen to the FDA in the past), demonstrating negligible side-effect profiles as well as easy physician and compliable patient administration modes, and targeting therapeutic areas with unmet clinical and commercial needs.[28]

Provectus faced two obstacles during its existence as an early-stage drug development company. First, there was regulator and pharmaceutical industry reservation about using locally delivered agents to treat melanoma. This bias resulted from a lack of material, long-lasting clinical success, illustrated by the initial promise but ultimate failure of Bacille Calmette-Guérin (“BCG”) for melanoma in the 1970s (serious adverse events and no significant clinical benefit[29]) and Vical’s Allovectin-7 for melanoma in 2013 (no clinical benefit[30], [31]), as well as comparatively lackluster OS in melanoma for T-Vec in 2014[32]. Allovectin-7’s CRR in its Phase 2 trial for metastatic melanoma was far lower than T-Vec’s, which was much lower than PV-10’s[33]. Second, Provectus originally sought consideration of PV-10 from the FDA for an earlier stage of melanoma when all of it is accessible for injection and overall disease burden is lower (Stage III patients), instead of pursuing advanced melanoma where not all disease is injectable (Stage IV patients) like BCG, Allovectin-7, T-Vec and the systemic immunotherapies.

Whether separately from or together with T-Vec, PV-10 may be the first (or one of the first) locally delivered therapeutic agent to be approved for melanoma. Systemically administered high-dose interleukin-2 was approved in 1998 for advanced melanoma.[34] Against the backdrop of a finalized melanoma Phase 3 protocol and evolving FDA and Big Pharma acceptance of intralesional therapies, there is a meaningful probability of PV-10’s melanoma Phase 3 trial being terminated early for efficacy of the treatment arm over the control. Historical data can be honestly used to determine the likelihood of success. Clear wins on trial endpoints should be acknowledged as former biases fall away.

Clinical development should expand substantially

If early-stage drug development company described Provectus from 2002 to 2015, 2015 marks the beginning of the Company’s transition into a regulatory-focused and data-driven organization. The knowledge base developed and consensus achieved by the FDA’s Division of Oncology Products 2 (“DOP2”)[35] and Provectus of what is necessary and sufficient to approve PV-10 as a monotherapy for loco-regional Stage III melanoma patients should enable the parties to design trial protocols and establish prospective pathways to approval in the future (with the FDA better understanding and having more experience with PV-10’s mechanism, utility and functionality) for a PV-10/immune checkpoint inhibition combination for patients with advanced melanoma, and monotherapy use in patients with hepatocellular carcinoma (“HCC”) and cancer metastatic to the liver.

Combination therapy for advanced melanoma: The second trial of Provectus’ oncology clinical development program that may start in 2015 could be a modest-sized (up to 20 patients), single-arm Phase 1b trial combining PV-10 and Merck’s immune checkpoint inhibitor pembrolizumab for patients with unresectable Stage IIIB to Stage IV advanced melanoma. Provectus may elect to go it alone and use the reimbursable pembrolizumab because of Moffitt’s familiarity with it. Alternatively, the Company could enter into a co-development relationship with this Big Pharma or another one (and its approved or investigational inhibitor). Endpoints would comprise acute safety (of the combination regimen, with PV-10 given first followed by the inhibitor) and objective response rate (“ORR”) (CR + PR) measured at 3 to 4 months.[36] This trial protocol would be agnostic to the inhibitor. Moffitt has completed preclinical combination studies of PV-10 and co-inhibitory blockade (anti-CTLA-4, anti-PD-1, anti-PD-L-1). There should be low or no clinically relevant drug-drug interactions. It is rumored Merck has done due diligence on Rose Bengal through its own murine model work.

Phase 1b/2 studies may streamline drug development and rapidly advance a promising agent demonstrating notable efficacy and sufficient safety through the regulatory process. The initial step (Phase 1b) collects safety and response data from a small number of patients. A successful outcome facilitates subsequent discussions with the FDA about a pivotal trial design for the second step (i.e., a randomized Phase 2 or other aptly named late-stage trial).

Amgen and Bristol-Myers already conducted a Phase 1b trial combining T-Vec and ipilimumab in 19 patients with advanced melanoma.[37] No dose-limiting toxicities and a predominance of Grade 3/4 adverse events were reported. In addition to evidence of immunological signaling, preliminary data suggested higher CRR and ORR than either T-Vec or ipilimumab alone, and earlier responses after ipilimumab initiation during the combination regimen than with ipilimumab alone. In contrast, Moffitt described a greater breadth and depth of T-cell response (CD8+, CD4+, CD3+ and NK) from a single injection of PV-10 in a Phase 1 mechanism study, compared to arguably weaker signaling from repeated, prolonged treatments of T-Vec and ipilimumab. Nevertheless, the results of the T-Vec plus ipilimumab trial inform how an immune system primer (T-Vec) enhances the effectiveness of an immune checkpoint inhibitor (ipilimumab).

Monotherapy for HCC/ metastatic liver cancer (U.S.): A third trial that may be started in 2015 could be a domestic liver cancer one, the design of which is dependent on available data and subsequent guidance from DOP2, the same organization within the FDA responsible for melanoma. Provectus previously completed a liver Phase 1 trial that treated six patients with HCC (five tumors) and a colorectal metastasis from 2009[38] to 2011[39]. The Company has not yet presented or published results from this trial. Presentation is expected this summer. Management previously said tumors were substantially ablated with sustained regression and no disease per positron emission tomography–computed tomography at the patients’ 9- to 15-month check-ups.

In 2012[40] Provectus commenced an expanded Phase 1. The number of treated patients is not yet public. Per the trial’s protocol[41] patients were divided into two cohorts; one received PV-10, and the other both PV-10 and sorafenib. Safety was the primary outcome measure for both liver trials. The second trial had a secondary outcome measure (among others) of ORR of injected and measurable untreated lesions (if present). Sorafenib is the standard of care for patients with more advanced liver cancer or who failed loco-regional therapy.[42] Prior to treating patients in the PV-10-plus-sorafenib cohort, however, Provectus conducted an in vitro study that demonstrated a low risk of clinically relevant drug-drug interaction between Rose Bengal and sorafenib derivatives[43]. This orthogonality assigns the efficacy difference between the two cohorts in the second liver trial solely to PV-10’s clinical benefit. Provectus may seek an expedited pathway to approval via a pivotal trial based on (but not limited to) safety from both liver trials, overall survival observations from the first, measures of ORR from the second, and PV-10/sorafenib orthogonality.

Company management recently said they are assessing potential clinical study of other indications like breast cancer and pancreatic cancer[44]. It is unlikely such work would commence this year given management’s potentially taxed mental bandwidth (management made deliberate choices from the outset regarding operational roles and responsibilities, and these remain unchanged). Provectus’ drug development program also comprises on-going third party research that is rumored to include work on breast, pancreatic and prostate cancer, and renal cell carcinoma. Provectus’ Chief Technology Officer Dr. Wachter commented on this during the Company’s last quarterly conference call:

Dr. Wachter: “I cannot comment on other third-party work that may or may not be underway with regard to non-clinical work with PV-10. Obviously that is something that may be of interest and if it is, and we haven't disclosed this, it’s probably a sensitive nature.”[45]

The oncology clinical development program’s expansion in two key areas — primary and metastatic liver cancer as another approvable indication, and combination therapy for advanced melanoma as an approvable indication expansion — establishes PV-10’s multi-indication viability, broader utility across disease stage spectrum, and greater functionality as a monotherapy and in combination with other treatments as an immune system primer.

Regulatory clarity should facilitate commercial validation

Management has pursued international commercial validation for a couple of years, and over time said licensure discussions have taken place for China, India, Brazil, Russia, Korea, Japan, and the Middle East and North Africa. Completing these deals supplement but should not interfere with a worldwide oncology license for the drug or the eventual sale of the Company to Big Pharma. With an FDA-accepted melanoma Phase 3 protocol finally in hand, a deal or deals may be had with a dominant pharmaceutical company in the respective geography. Provectus currently has a memorandum of understanding for China and its territories with two Sinopharm Group Company subsidiaries, China State Institute of Pharmaceutical Industry and A-THINK Pharmaceutical Co.[46]

If a deal is transacted, a key element of the relationship likely would be the joint undertaking (with the geographic partner) of a Phase 1b/2 trial of PV-10 as a monotherapy versus the particular region’s [loco-regional ablation therapy] standard of care for patients with HCC and metastatic liver cancer. This should require the acceptance of the locally focused protocol by the local regulator, and may be the case with the China Food and Drug Administration (“SFDA” or “CFDA”). Dr. Wachter discussed his perspective of the regulatory pathway in China and the Company’s likely approach to it on the last two Provectus’ quarterly conference calls:

November 2014: “What we have learned in the relatively recent past is with our experience in Asia that it will be necessary going into China to do some additional Phase 1 work and that has colored our design parameters for the next Phase of HCC work to use this 1b-2 approach that I might point out from a prepared comments has been so successful with Amgen and a number of other sponsors in recent years as a way to expedite development of the drug from the Phase 1 safety into a very robust randomized Phase 2 study in a quick fashion.”[47]

March 2015: “So in the part of the world like China which is an interesting case, we might be able to access a large number of patients that would be eligible for the study but for instance the approval process to get the study going, not technical review of the protocol and modifications, I have gone to the agency but just the fundamental review process for conducting a clinical trial where an investigation drug can be very prolonged, often times 12 to 18 months.”45

Monotherapy for HCC/ metastatic liver cancer (China): PV-10’s Chinese pathway to approval for liver cancer thus might be the first step of a modest-sized, single-arm Phase 1b trial in 2016 combining PV-10 and a Chinese-favored loco-regional ablation therapy (e.g., transarterial chemoembolization, percutaneous ethanol injection)[48]. Endpoints may comprise acute safety of the combination regimen and hepatic ORR measured at some single digit number of months. A successful outcome could facilitate subsequent discussions with the SFDA/CFDA about a pivotal trial design for a randomized late-stage trial comparing PV-10 and the chosen ablation therapy for OS, among other primary and secondary endpoints.

PH-10 should garner more attention as a very valuable therapeutic asset

By launching a Phase 2 mechanism of action study that started recruiting patients in January and should complete data collection by year-end, existing and prospective investors in the Company are able to better value Provectus’ investigational dermatology compound PH-10. The drug may have an addressable market of all inflammatory dermatoses that could be larger than that of PV-10. Company management has tried to license the drug since at least 2010[49] without success because regulatory clarity had been lacking. This was very likely due to a paucity of data for the regulator and prospective commercial partners, particularly as it relates to near complete absence of toxicity for PH-10. Multiple preclinical toxicity studies should be done:
  • Genotoxicity (Ames, Micronucleus and Comet assays),
  • Reproductive toxicology (rat DART testing),
  • Dermal toxicity and phototoxicity (minipig),
  • Dermal carcinogenicity, and
  • Chronic toxicity (minipig, rat).
In addition, a key PH-10 patent was issued in March (Topical medicaments and methods for photodynamic treatment of disease[50]), which protects use of the drug for non-dermatology applications (e.g., bladder cancer, oral disease, post-surgery). Observations and conclusions from the toxicity studies, clinical mechanism data and existing clinical data from previous trials should facilitate Agency discussions about consensus pivotal Phase 3 trial designs for psoriasis and/or atopic dermatitis. With regulatory clarity in hand, Company management should be in a much better position to finally achieve a global or regional dermatology license for this asset.

Much more data should be presented or published

Provectus last published new clinical data (about its melanoma Phase 2 trial) at the 2010 annual meeting of the Society for Melanoma Research[51] and new preclinical data (about PV-10 in combination with immune checkpoint inhibition [anti-CTLA-4]) at the 2013 annual meeting of the American Association for Cancer Research (“AACR”).[52] Phase 2 trial results and exploratory analyses were presented at annual meetings of the American Society of Clinical Oncology (“ASCO”), European Society for Medical Oncology (“ESMO”), European Association of Dermato Oncology (“EADO”) and European CanCer Organisation (“ECCO”): ASCO 2009[53], ASCO 2010[54], ESMO 2012[55], ECCO 2013[56], EADO 2014[57], ASCO 2014[58] and ESMO 2014[59].

Moffitt published preclinical data at the 2012 annual meeting of the Society of Surgical Oncology[60], AACR 2013[61] and 2014 annual meeting of the Society for Immunotherapy of Cancer (“SITC”)[62], and clinical data at AACR 2014[63] and ASCO 2014[64]. This cumulative work independently repeated and reproduced the Company’s preclinical and clinical results and claims. Moffitt’s recent work has focused on PV-10’s mechanism. According to Moffitt’s disclosures, Provectus provided only PV-10 to the cancer center for its experiments (a non-author is a paid consultant to the Company).

Additional preclinical and clinical data should be forthcoming this year and next:
  • Liver (clinical): Company management said they expect to report data at one or more international conferences this summer, possibly the World Congress on Gastrointestinal Cancer in Barcelona, Spain (April 21 abstract notification) and/or the Annual Conference of the International Liver Cancer Association in Paris, France (late-June abstract notification),
  • PV-10’s mechanism (clinical): It’s unclear when and where Moffitt would present and/or publish additional mechanism results. Previous study results were presented at AACR and ASCO 2014,
  • PV-10 in combination with immune checkpoint inhibition (preclinical): It’s also unclear when and where Moffitt would present and/or publish additional results of combining PV-10 and co-inhibitory blockade (anti-CTLA-4, anti-PD-1, anti-PD-L-1). Cursory results were presented at SITC 2014, and
  • PV-10 in combination with XRT (clinical): Australian researchers should disclose interim clinical data of an investigator-initiated study of 25 patients who received a single injection of PV-10 per lesion followed by XRT. Preliminary study of 3 patients in 2010[65] yielded complete responses without a significant increase in acute radiation reaction.
Mechanism (melanoma [clinical], breast [preclinical]), combination with other treatments (XRT and melanoma [clinical]) and therapies (systemic chemotherapy and liver [preclinical], immune checkpoint inhibition/melanoma [preclinical]), overall survival-focused (liver [clinical]) and interim melanoma Phase 3 (clinical) data affirms PV-10’s proposition that complete response of cancerous tumors after PV-10 injection results in the disease staying away, irrespective of solid tumor indication or disease stage. It’s very likely that late-stage disease, where patients may be overwhelmed by inaccessible tumor burden, requires the additional use of XRT or immune checkpoint inhibition to reduce this burden before the PV-10-stimulated immune system finishes the job.

Favorable pharmaceutical industry trends should provide valuation tailwinds

Provectus achieved a sizeable measure of regulatory clarity it previously lacked. I framed this necessary step in my September 2013 investment letter[66]:

“When regulatory clarity is achieved, it would be FDA validation of the local agent's systemic properties and benefit. When more clinical trials are conducted and regulatory clarity is achieved for other indications, regional and/or worldwide license transactions are consummated, and the investment community is more aware of the drug and the Company, Provectus' market capitalization should substantially increase from its current valuation. The share price should enjoy significantly more upside from there when acquisitive global pharmaceutical companies, having fully embraced PV-10's immense oncology value proposition for their respective business franchises, pay up for this unique, fully owned, cancer treatment asset.”

Key clinical trends have overtaken the pharmaceutical industry in regards to treating cancer: the tumor microenvironment as the route of delivery, supercharging T-cells to better harness the immune system, and de facto combination therapy for late-stage disease.

Immune checkpoint inhibition (so called “releasing the brakes”) no longer is the panacea it initially was believed to be for harnessing the immune system to treat late-stage cancer, the pharmaceutical industry’s historic and current focus. After well more than a decade of development and hundreds of millions if not billions of cumulative dollars in expenditure by Big Pharma, the FDA approved anti-CTLA4 therapeutic ipilimumab in 2011 for advanced melanoma, and next generation anti-PD-1 therapeutics pembrolizumab and nivolumab burst onto the scene at ASCO 2013 and were first approved in 2014 for advanced melanoma. Non-specific immunotherapies require a dynamic tumor antigen expression process — front-end radiation therapy, targeted chemotherapies or intralesional therapies like T-VEC and PV-10 — to optimally potentiate the body’s T-cells against the inciting cancer. That is, they require the “engine to be started” and/or the “gas pedal to be stepped on” because the car itself may be unable to move or is moving very slowly (i.e., make non-immunogenic tumors immunogenic, and immunogenic ones more so). Without a viable front-end (immune system primer), the back-end (immune checkpoint inhibition) is limited.

Big Pharma oncology franchises are separating into three categories: those with immune checkpoint inhibition that admit the need for a primer (e.g., Bristol-Myers, Merck, Novartis, Roche), those who do not fully admit such need (e.g., AstraZeneca), and those who have a stimulatory compound (e.g., Amgen), an inhibitor (e.g., Pfizer) or neither (e.g., J&J) and know they require a matching set to remain relevant in oncology. Outside of PV-10 there is an inventory of various co-stimulatory and agonist agents (e.g., anti-CTLA-4, anti-CD137, anti-OX40, anti-CD27, IL-2, IL-12, vaccines, IFN-α, GM-CSF, anti-CD40, Toll-like receptors[67]) that can start the engine and/or step on the gas pedal. Each has advantages and disadvantages with regard to cost, safety and level of antigen expression individually and in combination with a co-inhibitory or antagonist partner. PV-10’s unique functional and approvable blend of low cost, high safety, high expression, and orthogonality may offer the perfect way to prime the immune system[68].

Other relevant Big Pharma trends include obviously bulging balance sheet cash amounts and emptying drug pipelines.

Provectus is on the cusp of meriting a “Phase 3 badge.”[69] Small biotechnology companies whose drug candidates present compelling value propositions based on well-defined patient populations, notable clinical value and advantageous economic value[70]  — and have achieved regulatory clarity — should see dramatically increased market capitalizations, and have presented to them lucrative buy-out options commensurate with the breadth and depth of their propositions. I believe Provectus will be one of these companies:
  • The Company’s drug compounds have compelling clinical and business value propositions. Regulatory clarity has been achieved. Commercial validation should follow,
  • The first pathway to oncology approval is set,
  • The oncology clinical development program should expand this year,
  • A regional geographic license for PV-10 should follow in China and/or India, along with a local liver trial involving PV-10,
  • Inflammatory dermatoses therapeutic PH-10 finally should garner more attention,
  • More data should be presented and published this year, and
  • Favorable pharmaceutical industry trends should further improve Provectus’ M&A valuation prospects.


[2] Gnehm R.Ueber Tetrachlorphtalsäure. Justus Liebigs Annalen der Chemie 1887; 238:318–338
[3] Feenstra RPG and Tseng CG. What is actually stained by rose bengal? Arch Ophthalmol 1992; 110:984-993.
[4] Sjögren H. (1933) Zur Kenntnis der Keratoconjunctivitis sicca (Keratitis filiformisbeiHypofunktion der Tränendrüsen). Acta Ophthalmol 1933; 11 suppl. 2:1-151.
[5] Delprat GD. Studies on liver function: Rose Bengal elimination from the blood as influenced by liver injury. Archives of Internal Medicine 1923; vol. 32:401-410.
[8] Ito A, Watanabe H, Naito M, Aoyama H, Nakagawa Y, Fujimoto N. Induction of thyroid tumors in (C57BL/6N x C3H/N)F1 mice by oral administration of 9-3',4',5',6'-tetrachloro-o-carboxyphenyl-6-hydroxy-2,4,5,7-tetraiodo-3-isoxanthone sodium (Food Red 105, Rose Bengal B). J Natl Cancer Inst 1986 Jul; 77(1):277-81.
[11] Moffitt, 4th European Post-Chicago Melanoma/Skin Cancer Meeting (2014)
[12] Rose Bengal, PV-10 and PH-10’s active pharmaceutical ingredient, has an established FDA safety profile for prior human use as an intravenous hepatic diagnostic (Robengatope®) and topical ophthalmic diagnostic (Rosettes® and Minims®)
[13] Thompson, Agarwala et al., Phase 2 Study of Intralesional PV-10 in Refractory Metastatic Melanoma, Annals of Surgical Oncology (2014)
[15] Provectus website, page: Clinical Trials and Compassionate Use/PV-10 for Melanoma
[21] Illustrative examples: Moffitt Cancer Center, Various; Zamani Taghizadeh Rabe et al., Rose Bengal suppresses gastric cancer cell proliferation via apoptosis and inhibits nitric oxide formation in macrophages, Journal of Immunotoxicology (2014); Tan et al., Novel use of Rose Bengal (PV-10) in two cases of refractory scalp sarcoma, ANZ Journal of Surgery (2013); Koevary, Selective toxicity of rose bengal to ovarian cancer cells in vitro, International Journal of Physiology, Pathophysiology and Pharmacology (2012)